Circle’s USDC Withdrew And Burned In A Large-scale Panic

Key Points:

• Circle is facing problems as USDC, its stablecoin faces large withdrawals.
• The stablecoin issuer also confirmed the extent of the company’s influence in the fall of Silicon Valley Bank

The US financial crisis has spread to the crypto market, which can be clearly seen by the fact that Circle’s USDC is losing its $1 peg.

0xScope tweeted that USDC is decoupling, and statistics show large-scale panic withdrawal/burn.

Among them, 7.66 billion USDC was withdrawn from CEX in the past 24 hours, Jump cashed out 150 million USDC, Wintermute/FalconX deposited USDC into Coinbase, and 2.4 billion USDC was burned in the past 24 hours.

In addition, the data collected by 0xScope shows that Voyager has the most exposure. Before USDC was depegged, Voyager was the largest Externally Owned Account (EOA) holder. Total confirmed losses are currently $31 million.

This consequence is attributed to the fact that Circle, the second-largest issuer of stablecoins in the market at the moment, was directly exposed to the crisis of Silicon Valley Bank.

Circle employs the bank as one of six banking partners to manage the 25% share of USDC reserves stored in cash. The stablecoin issuer confirms that it is awaiting clarification on how the FDIC receivership of SVB would affect its depositors and that it is continuing to function regularly.

Circle has confirmed that it has deposited $3.3 billion in USDC collateral with Silicon Valley Bank. After a period of silence and pressure from the cryptocurrency community, the stablecoin issuer revealed that the amount impacted by Silicon Valley Bank’s bankruptcy was $ 3.3 billion, or 8.25% of total assets. USDC will collect $40 billion in collateral, well beyond previous predictions.

Although denying any affiliation with the failed bank, Binance and its BUSD stablecoin issuer Paxos declared that they will halt converting USDC to BUSD due to the market scenario, including an increase in deposits and stablecoin conversion pressure.

Coinbase also said that it would halt USDC-USD conversions on weekends when banks are closed. When banks reopen on Monday, the exchange plans to begin swapping services. The assets of users are safe and may be transferred at any point along the chain.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Harold

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