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Justin Sun, founder of the Tron network and a one-time, potential savior of the insolvent crypto exchange FTX, moved $6.1 million in stablecoins from decentralized lending protocol TrueFi, which is among companies weighted down by FTX sister company Alameda Research’s debts.
Transaction data on the blockchain shows that Sun withdrew the funds in four transactions processed Thursday. He moved $2.4 million of USDT, 2.1 million of USDC, $1 million TUSD and $673,000 in BUSD from the four available credit pools on the lending protocol.
Justin Sun withdrew funds from TrueFi pools Thursday, according to blockchain data. (Arkham Intelligence)
The crypto wallet has been identified as Sun’s by crypto intelligence platforms Arkham Intelligence and Nansen.
Justin Sun and representatives of TrueFi had not replied to requests for comment at the time of publication.
TrueFi is a decentralized lending protocol where liquidity providers can lend money for a yield, and borrowers can take out loans for interest. The loans are uncollateralized, meaning that creditors do not pledge assets against it. Borrowers secure the loan with only their good financial standing and trust.
The withdrawals are another sign of an ongoing liquidity crunch in crypto credit markets following the sudden implosion of FTX and Alameda Research, a trading firm.
Alameda Research has a $7.3 million outstanding debt on TrueFi’s Capital Markets credit facility, managed by TrueTrading. Alameda’s bad debt represents almost half of all current outstanding loans on the protocol, according to TrueFi’s dashboard. After Alameda filed for bankruptcy protection Friday, chances are low that it will be able to repay the loan.
TrueFi has already been rocked by two recent loan defaults. South Korea-based Blockwater defaulted on a $3 million debt despite restructuring efforts, and Invictus Capital didn’t pay back a $1 million loan by the maturity date after it filed for court-assisted liquidation earlier this year.
The total value locked on TrueFi cratered to $32 million from $544 million in the last six months as appetite for crypto borrowing dwindled, according to decentralized finance data site DefiLlama.
Read more: TrueFi’s $4M Bad Debt in Limbo Shows Risk of Crypto Lending Without Collateral
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