In an exclusive interview with Forkast Editor-in-Chief Angie Lau, Circle Chief Broker Jeremy Fox-Geen, the aforementioned reserves backing the dodgy USDC stablecoin are immune to any potential fallout from the contagion engulfing markets in cryptography. Being regulated by state money transmission laws in the United States suggests that Circle Net’s monetary limited liability company has no rights to the reserves backing USD Coin (USDC), the report said. CFO Jeremy Fox-Geen to Forkast Editor-in-Chief Angie Lau in an exclusive interview.
USDC reserves are ordered in separate accounts
Reserves supporting the USDC are held in segregated accounts with financial institutions, Fox-Geen said. Customers retain their rights to funds in these accounts once they pay in US dollars to have USDC minted by Circle and deposited into their wallets, Fox-Geen explained.
His comments come back as Twitter user @CryptoInsider23 alleged that Circle’s USDC stablecoin project was on the brink of collapse. “They are at major risk of defaulting on USDC reserves,” the user alleged.
The allegations come amid the Terra-UST collapse that wiped out billions of capitalist wealth. The resulting value came from cryptocurrencies amid tangled lending and investing, leading to a wave of withdrawal freezes and trade bankruptcies as companies scrambled to ban a run for money. bank.
Significant increase in USDC market capitalization
3 Arrows Capital filed for Chapter Fifteen bankruptcy to protect U.S. assets from foreign creditors, while Traveler Digital filed for Chapter Eleven bankruptcy in the Big Apple thanks to 3AC’s default on a $680 million loan price US dollars at current costs in USDC stablecoin and bitcoin.
Meanwhile, since May 1, USDC’s capitalization has increased by 12% to more than US$55 billion in late-night trading in Asia on July 8, according to data from CoinMarketCap. By comparison, the capitalization of Tether (USDT), the world’s highest stablecoin, grew by 20% to $66 billion over the same period.
Circle pays Signature Bank and Silvergate Bank an annual interest of around 5% on reserves of stablecoins ordered by the banks, the Twitter user claimed.
The user accused banks of reusing reserves to mint additional USDC to abnormally inflate the stablecoin’s market capitalization. The born-again USDC is then selected by Signature and Silvergate for “high risk” clients such as Genesis, BlockFi, Celsius, Galaxy, Alameda and 3AC, @CryptoInsider23 alleged.