Exhaustion Of USDC Reserves Causes FTX Transaction Congestion
There were several occurrences of USDC withdrawals that had to wait quite a time from last night to this morning owing to the depletion of USDC reserves on FTX.
This might be due to a large number of people withdrawing unexpectedly at the same time to safeguard valuables, comparable to a bank run.
Meanwhile, Alameda receives a large amount of USDC from Circle and transfers it to the exchange. This operation is most likely intended to fill USDC so consumers can withdraw.
In response to the fact that many users need to wait to withdraw, FTX did not admit that the hot wallet was insufficient and urgently allocated. The exchange said that banks are closed for the weekend, and USD or stablecoin creations/redemptions might be slower until wires clear tomorrow.
This is a consequence of the large number of users withdrawing from the exchange before the Binance withdrawal from FTX reported by Coincu today.
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