The founder of Tron withdrew USDT tokens worth $100 million from the Aave Protocol V2 in two separate transfers of $50 million apiece to an account sponsored by the Poloniex cryptocurrency exchange service.
Sun's withdrawal caused the USDT in the Aave Protocol V2 pool TVL (Total value locked) to shrink from $300 million to $200 million.
The recent block put by Aave on the account of the Tron founder following a Tornado Cash ETH payment is probably the cause of the large number of withdrawals that were made. Aave suspended Justin Sun's address in August after he acquired 0.1 ETH at random from the cryptocurrency mixer Tornado Cash, which was blocked. Founder and CEO of Aave Stani Kulechov was contacted for help, and Justin Sun's Aave account was eventually restored.
On the Ethereum network, numerous dapps deployed code updates in August to refuse entry from “sanctioned” accounts. Customers who had communicated with Tornado Cash were labeled as “sanctioned” and subsequently banned from DeFi protocols like Aave, Uniswap, Ren, Oasis, balancer, TRM Labs, in addition to other crypto platforms after the US Treasury Department's Office of Foreign Assets Control (OFAC) decision to penalize all accounts related to Tornado Cash throughout that month.
Sanctions were imposed on all users, including residents, who had previously received money from a Tornado Cash address in addition to addresses linked to Russia.
The founder of Tron has previously made similar sizable transactions from a cryptocurrency exchange. In October of last year, Sun removed cryptocurrencies valued at billions of dollars from the lending pools of DeFi lending platform Aave. The withdrawals caused the platform's liquidity to be drastically reduced, which led to significantly higher interest rates.
The transfer was thought to be connected to worries among DeFi community members about the possibility that Aave was susceptible to the same 'exploit' as the one that affected DeFi protocol Cream Finance earlier in that month and led to the theft of cryptocurrency valued at $130 million.
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