Justin Sun and Tron Make Big Moves on Binance – Cause for Alarm?

TRON and Binance are moving enormous amounts of capital as the exchange faces huge withdrawals.

TRON token falling on a man.
  • Binance is moving $3 billion Tether from TRON to Ethereum Network.
  • Justin Sun deposited 100 million USDC on Binance.
  • Sun withdrew the funds shortly after. 

Huge transfers of capital have raised alarms among investors amid growing concerns over stablecoins and centralized exchanges. In the most recent development, Binance and TRON have captured the spotlight.

On Tuesday, December 13th, Binance moved $3 billion Tether (USDT) from TRON to the Ethereum network. The stablecoin issuer announced that it is working with the crypto exchange Binance to perform the transaction.

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The transaction came as Binance saw a net $1.14 billion in withdrawals in 24 hours. This raised fears among some investors that the largest crypto exchange could face a bank run.

Sun initially withdrew funds from the exchange. In the transaction, the Tron Founder pulled 30 million BUSD and 15 million USDT out of the exchange, converting the USDT into USDC. Just hours later the same day, Sun deposited 100 million USDC into Binance.

Binance CEO Changpeng “CZ” Zhao suggested that the move was a part of deploying BUSD on TRON. However, he added that he is not directly handling the matter.

Sun’s deposits came just as Binance announced that it would be temporarily halting USDC withdrawals due to liquidity issues with regard to the stablecoin. 

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CZ claims that the tokens are fully backed, but the swaps couldn’t happen before the banks in New York opened. 

Tron’s Stablecoin USDD Depeggs

In related news, Binance is moving $3 billion Tether from the TRON blockchain (TRC20) to the Ethereum blockchain (ERC20). The transfer comes amid concerns surrounding Tron’s algorithmic stablecoin USDD. Tron’s USDD coin is supposed to remain steady at around $1 per coin. However, the stablecoin came under pressure on Monday, dropping as low as $0.97. 

Justin Sun soon announced that he would be propping up the token by adding more reserves. “Deploying more capital – steady lads,” Sun tweeted, mocking the unfortunate comment made by Do Kwon in May

Since then, USDD has been slowly trending upwards. At the time of publication, the token was trading at $0,9827.

Some investors are concerned that algorithmic stablecoins like USDD hold the same inherent risks as Terra-Luna. Earlier this year, the Terra (UST) stablecoin crashed to zero after losing its dollar peg. 

On the Flipside

  • The eccentric TRON founder Justin Sun is known for his publicity stunts. Big funds transferred from one wallet to another could just be a way to get attention. Some have suggested the transfers are intended to steady nerves, while some have contested the claim, opining that a deposit signifies the opposite.

Why You Should Care

Binance is the largest crypto exchange, and its collapse could have catastrophic consequences for the crypto market. 

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
David Marsanic

David Marsanic is a journalist for DailyCoin who covers the intersection of crypto, traditional finance, and government. He focuses on institutionalized crypto entities like major cryptocurrency exchanges and Solana, breaking down complex topics into easy-to-understand writing. David's prior experience as a business journalist at various crypto and traditional news sites has enabled him to maintain a critical approach to news while adhering to high journalistic integrity standards.