Investors have moved about $1.6 billion from USDC to rival stablecoin USDT over the past month as regulators in the United States increase scrutiny of the crypto company.
Investors have moved about $1.6 billion from USDC to rival stablecoin USDT over the past month as regulators in the United States increase scrutiny of the crypto company.
Among them, there is a “huge” amount of money that was transferred after August 10, when Circle – the USDC issuer, froze 75,000 USDC belonging to users related to Tornado Cash. As reported by Bitcoin Magazine, this crypto mixing service is sanctioned by the US government for alleged money laundering.
Circle said it froze the funds to comply with US sanctions laws. However, the decision received a lot of “brick and stone” from crypto enthusiasts. They are concerned that the company’s excessive intervention corrupts the private and decentralized nature of cryptocurrencies.
Investors flee USDC
According to CoinMarket, the total market capitalization of stablecoin USDT increased by about $1 billion to $67.43 billion in five days after Circle blacklisted Tornado Cash-related wallet addresses.
According to the data, the total market value of USDC fell by more than $500 million during the same period, suggesting that the money being transferred to USDT may have originated elsewhere.
Over the past four weeks, USDC’s market capitalization has been down 2.3% ($1.3 billion) to $53.5 billion as of press time. Meanwhile, USDT’s total market capitalization grew 2.4% ($1.57 billion) during the same period.
Gabor Gurbacs, the strategist at asset manager VanEck, tweeted :
“After the recent US push for regulation against crypto and token companies, I wouldn’t be surprised if large institutions and players feel more secure for their money outside of the US.”.
Both USDC and USDT are pegged to the US dollar. While Hong Kong-based Tether is often accused of a lack of transparency about the reserves that support the stablecoin USDT, Center, the US corporation behind USDC, has been criticized for fawning over government agencies.
Since launching USDC in September 2018, the Center has now banned 81 wallet addresses under US government sanctions against crypto companies, individuals, or groups.
Tether ran into problems in May when panic-stricken investors withdrew about $7 billion USDT in just some days following the spectacular collapse of the Terra blockchain.
