Michael Patryn, the infamous co-founder of the exchange QuadrigaCX, which was declared bankrupt in 2019, has made a very nice trade on the stablecoin TerraUSD (UST). The stablecoin has fallen hard and normally always has a value of $1.
How does UST work?
But how is that possible? UST is an algorithmic stablecoin that represents the dollar 1-to-1 through the cryptocurrency terra (LUNA). Any UST stablecoin can be converted to LUNA and vice versa. As a result, it is not necessary to keep the stablecoin stable through fiat or over-collateralized crypto as a backup. However, this did not last after many whales dumped their LUNA on the market.
UST & LUNA crash
The Luna Foundation Guard, a non-profit organization that supports the UST, was forced to sell all the bitcoin (BTC) they owned in order to get the UST value back to $1. Despite the effort, this was not successful. The value of UST fell as low as $0.69 yesterday and even fell as low as $0.30 today. Something a stablecoin should not do.
Yet there are smart minds like Patryn who managed to take advantage of this. PeckShield data revealed that the Ethereum address linked to Patryn has made several trades with UST.
Patryn’s UST trade
This data showed that he had converted 2.8 million in tether (USDT) to 3.88 million UST at its lowest point. UST then rose to $0.94, where Patryn had converted everything back to USDT. As a result, he managed to make about $760,000 in profit. After that, he transferred some profits to the Avalanche blockchain.
Patryn has reported making approximately $80 million in profit from investments in the past two years. This trade can therefore be put back on his CV. However, Patryn was still in the crypto news this year. He is said to have funneled millions from the Wonderland (TIME) project, which has completely collapsed.