Arbitrageurs Take Advantage of USDT Depegging

The stablecoin USDT from Tether deviated from parity with the US dollar. The coin’s weighted average price fell to 0.995 (CoinGecko).

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Lookonchain experts noted that immediately after the depeg, an investor under the nickname czsamsun.eth shorted the coin on the DeFi protocol Aave V2. He borrowed 31 544 278 USDT and immediately swapped for 31 475 408 USDC at a rate of $0.9978.

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USDT is depegging!

CZsamsun.eth shorted $USDT on #AaveV2 after USDT depegged.

He borrowed 31,544,278 $USDT from #AaveV2 and exchanged for 31,475,408 $USDC at a rate of $0.9978.

And he deposited 10M $USDC again on #AaveV2. pic.twitter.com/3rrfENocRk

— Lookonchain (@lookonchain) June 15, 2023

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Another user took advantage of the drop in the stablecoin’s price by borrowing USDC to buy USDT and repay the loan in the coin.

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Another whale borrowed 50 million USDC on Aave for arbitrage of Tether’s stablecoin. He converted the assets into USDT in several tranches.

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Whale»0xd275″ borrowed 50M $USDC from #Aave after #USDT depegging and started buying $USDT to arbitrage.https://t.co/8Tqow2B9Ie pic.twitter.com/SD3jsT4scL

— Lookonchain (@lookonchain) June 15, 2023

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The Chief Technology Officer of Tether and Bitfinex, Paolo Ardoino, calmly responded to the depeg of the stablecoin:

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“Markets are nervous these days, so attackers can easily profit from the general mood. We at Tether are as always ready. Let them come, we will redeem any amount.”

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Markets are edgy in these days, so it’s easy for attackers to capitalize on this general sentiment.\nBut at Tether we’re ready as always. Let them come.\nWe’re ready to redeem any amount.

— Paolo Ardoino ? (@paoloardoino) June 15, 2023

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On June 12, the issuer authorized 1 billion USDT for issue with the aim of “replenishing reserves.” The total circulating supply is 83.5 billion coins.

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In the first quarter, Tether reported a net profit in the amount of $1.48 bn.