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

news.coincu.com

11 March 2023 08:29, UTC

Reading time: ~3 m

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

. $USDC is on depeg, and stats showing massive panic withdraw/burn:

1. 7.66B $USDC withdrawn from CEX in 24H
2. Jump cashed out 150M USDC.
3. Wintermute/FalconX deposit USDC to #coinbase.
4. 2.4B $USDC burned in the last 24H.

Check live stats here:https://t.co/2ePNQWpuiK pic.twitter.com/22cpgUML5v

— 0xScope (🪬 . 🪬) (@ScopeProtocol) March 11, 2023

Among them, 7.66 billion USDC was withdrawn from CEX in the past 24 hours, Jump cashed out 150 million USDC, Wintermute/FalconX deposited USDC into Coinbase, and 2.4 billion USDC was burned in the past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

In this $USDC deg, Voyager seems to have the most exposure.

Before the de-peg, Voyager owns 529M $USDC and Voyager:0x500a is the top 1 EOA holder.

They sold their portfolio like ETH/VGX/SHIB for these.

Right now their unrealized loss is ~$31M.

Track:https://t.co/VHhzTFm160 pic.twitter.com/E1IxCIuN26

— 0xScope (🪬 . 🪬) (@ScopeProtocol) March 11, 2023

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.

JUST IN: Circle $USDC depegged and is now trading at $0.95 pic.twitter.com/6RZLlht4O3

— Watcher.Guru (@WatcherGuru) March 11, 2023

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 is currently protecting #USDC from a black swan failure in the U.S. banking system. @SVB_Financial is a critical bank in the U.S. economy and its failure – without a Federal rescue plan – will have broader implications for business, banking and entrepreneurs. https://t.co/CYi6Z26ngH

— Dante Disparte (@ddisparte) March 11, 2023

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.

1/ Following the confirmation at the end of today that the wires initiated on Thursday to remove balances were not yet processed, $3.3 billion of the ~$40 billion of USDC reserves remain at SVB.

— Circle (@circle) March 11, 2023

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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