The recent case of FDUSD stablecoin depegging has caught the attention of the crypto market. Wintermute, a prominent crypto market maker, leveraged this situation for significant profit.
Wintermute's Profit from FDUSD Depeg
Blockchain data revealed that Wintermute capitalized on the depegging of the FDUSD stablecoin, securing a $3 million profit. An analytics platform reported that Wintermute transferred over 75 million FDUSD tokens to issuer First Digital shortly after the stablecoin dropped to $0.87. The firm reportedly purchased over 31 million tokens on Binance during the depeg period at discounted prices.
First Digital's Response to Insolvency Rumors
First Digital refuted insolvency rumors and confirmed that FDUSD remains fully backed by assets. This statement followed accusations from Justin Sun, which led to market instability. The issuer asserts that all tokens are redeemable at a one-to-one ratio with the US dollar and intends to pursue legal action against those spreading false claims.
Increased Scrutiny of FDUSD Stability
S&P Global Ratings previously assigned FDUSD a stability rating of 4, indicating constrained stability. The agency explained that while the stablecoin is backed by assets, several factors, including governance, liquidity, and transparency, contributed to the low score. Following significant market liquidations in February, investor focus on market maker behavior has intensified.
The situation surrounding FDUSD and Wintermute's actions highlight the importance of the reliability of stablecoins in the face of market volatility and the dynamics of traditional finance.
