- Investors move $1.6 billion from USDC to USDT.
- The transfer occurred after Circle, the company behind USDC, froze $75,000 worth of USDC belonging to users linked to Tornado Cash.
- Earlier this month, the U.S. Treasury Department sanctioned Tornado Cash.
According to reports, investors have transferred $1.6 billion from USDC to another stablecoin, USDT, in the past month. This move came as a result of regulators in the United States clamping down on crypto and other blockchain companies.
Apparently, the amount was moved after Circle, the company behind USDC, froze $75,000 worth of USDC belonging to users linked to Tornado Cash.
Speaking about this development, Gabor Gurbacs, strategy advisor at VanEck, tweeted:
Looks like roughly $1 billion shifted from USDC to USDT over the past 1 month. After the recent regulatory push in the U.S. against crypto companies and tokens, I wouldn’t be surprised if institutions and larger players felt safer with their money outside the U.S.
For context, Tornado Cash is a blockchain protocol for sending and receiving anonymous transactions. On August 8, the U.S. Treasury Department sanctioned Tornado Cash, claiming that it laundered more than $7 billion worth of crypto assets since 2019. The sanctions prohibit any Americans from using Tornado Cash. The U.S. government insists that the app helps cyber criminals in money laundering.
Last week, Dutch authorities arrested a 29-year-old man believed to be a developer for Tornado Cash.
It was after this ban that Circle blacklisted the wallets associated with Tornado Cash and froze the assets. However, this move led to widespread backlash and criticism from the crypto community. Many users are questioning the stability of centralized assets that are prone to swaying under government rules and regulations.
Interestingly, Tether’s USDT Stablecoin rose significantly in market capitalization following the Tornado Cash issue. Meanwhile, USDC’s total market value plummeted over the same period.