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Circle clears ‘substantially all’ minting and redemption backlog for USDC

March 16, 2023 Coin Telegraph

backlog

The stablecoin issuer says that from March 13 and March 15, it redeemed $3.8 billion USDC and minted $0.8 billion USDC.

Stablecoin issuer Circle says it has cleared “substantially all” of the redemption and minting requests for its stablecoin, USD Coin (USDC).

In a March 15 operational update, Circle said between the morning of March 13 to the close of banking business in the United States on March 15, it had redeemed $3.8 billion USDC and minted $0.8 billion USDC.

Update: As of close of U.S. banking operations Wednesday, March 15, we have cleared substantially all of the backlog of minting and redemption requests for USDC. Get the details: https://t.co/5WEAgPps0E
— Circle (@circle) March 16, 2023

Last week, Circle was hit with a bank run after disclosing it had $3.3 billion worth of stablecoin reserves in the now-collapsed Silicon Valley Bank which resulted in USDC losing its dollar peg.

“The events of the past week have impacted the liquidity operations for USDC,” Circle wrote in its update. It added it worked to “re-initiate services with alternative banking partners, particularly payment and USDC redemption services.”

Circle said it went live with a new banking partner for U.S. wires on March 14 and used the same partner “for international wires to and from 19 countries” on March 15. It expects “to bring more capabilities” online by March 16.

Cross River Bank, which also services Circle's peer firm Coinbase, was disclosed as the firm's new commercial banking partner for producing and redeeming USDC on March 13. Circle also expanded ties with its existing custodian, the Bank of New York Mellon (BNY Mellon).

The announcement comes after a turbulent period for USDC that caused many to lose funds amid a flight to perceived safety from what was, at the time, a rapidly declining asset.

One unfortunate crypto user paid over $2 million to receive $0.05 of USDT in their apparent panic to cash out of the crash. An analysis revealed they possibly forgot to set slippage on their transaction, allowing a bot to net a significant profit.

Update (March 16, 3:30 AM UTC): This article has been updated to include further information on recent USDC-related events.

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Binance withdrawals and BUSD redemptions surge post Paxos crackdown

February 14, 2023 Coin Telegraph

Bank Run

Net outflows at the cryptocurrency exchange hit $788 million over the last 24 hours, however, Binance told Cointelegraph that “Funds are SAFU.”

Cryptocurrency exchange Binance has seen a surge of withdrawals over the last 24 hours as investors appear to be spooked over recent news of regulatory action against Paxos and its stablecoin Binance USD (BUSD).

At the same time, the BUSD token has recorded significant redemptions, with 342 million BUSD burned over the last 24 hours according to Peckshield.

#PeckShieldAlert ~342M $BUSD have been burned at Paxos Treasury within the last 24 hours, $BUSD MarketCap: $15.8Bhttps://t.co/BMeVokqVE6 pic.twitter.com/hJdnixxbtD
— PeckShieldAlert (@PeckShieldAlert) February 14, 2023

On Feb. 12, news broke that the United States Securities and Exchange Commission gave notice of potential enforcement action against Paxos. It alleged the stablecoin is an unregistered security, an assertion that Paxos denies.

Data compiled from the blockchain intelligence platform Nansen show that Binance recorded 24-hour multichain token net outflows of $788.5 million, caused by outflows of $2.7 billion exceeding inflows of around $1.97 billion.

According to Dune analytics data, it’s the largest 24-hour net outflow since Dec. 17, when Binance’s proof-of-reserve audits were removed from auditor Mazars’ website.

A spokesperson for Binance told Cointelegraph that “funds are SAFU” — backed by a Secure Asset Fund for Users — echoing what Binance chief Changpeng “CZ” Zhao said earlier on Feb. 13.

The spokesperson added that the exchange recently had a sell-off with “more than $1 billion” withdrawn in a 12-hour period, which it claims “was managed with ease.”

“We run a very simple business model — hold assets in custody and generate revenue from transaction fees,” Binance said, adding:

“We take our responsibility as a custodian seriously and maintain 1:1 backing for every user asset.”

Following the SEC’s action and a reported tip-off from USD Coin (USDC) issuer Circle, the New York Department of Financial Services (NYDFS) ordered Paxos to halt the issuance of BUSD on Feb. 13.

The outflows and token burns seemingly are a response to those events, with crypto users cashing out of the stablecoin over fears of further regulatory action.

Binance’s reserves harbor the largest amount of BUSD, holding $14.4 billion worth of the stablecoin, or around 90% of the $16.1 billion current market cap.

The crypto exchange also has around $60 billion worth of reserves, with 22% of that made up of BUSD.