VanEck analyst reports the transfer of $1 billion by investors from USDC to USDT in a month

The total market capitalization of Tether's stablecoin rose from $65,95 billion to $67,43 billion

16.08.2022 - 15:30

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What’s new? VanEck crypto fund strategy advisor Gabor Gurbacs said investors transferred about $1 billion from USDC to USDT over the past month. A significant portion of the amount migrated to USDT after August 10. This came amid the fact that Circle, the issuer of USDC, blocked the funds of users associated with the crypto mixer Tornado Cash, against which US authorities imposed sanctions on August 8. The amount of frozen funds exceeded $75 000 in USDC.

How did investors' actions affect Tether? Five days after Circle's decision, the total market capitalization of the USDT stablecoin rose from $65,95 billion to $67,43 billion, according to CoinMarketCap. As for USDC capitalization, it fell from $55,1 billion to $53,5 billion in 4 weeks. Gabor Gurbacs noted:

“Looks like roughly $1 billion shifted from USDC to USDT over the past 1 month. After the recent regulatory push in the US against crypto companies and tokens, I wouldn’t be surprised if institutions and larger players felt safer with their money outside the US”

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. https://t.co/QoEcSnCJDJ— Gabor Gurbacs (@gaborgurbacs) August 14, 2022

The US Office of Foreign Assets Control (OFAC) imposed sanctions against Tornado Cash, reasoning that more than $7 billion in total had been laundered using the service since its inception in 2019. Experts noted that the service was used by hackers from the Lazarus Group of North Korea.

MakerDAO co-founder Rune Christensen proposed converting USDC from the $3,5 billion DAI stablecoin reserve into ETH to reduce the risk of losing the asset's parity to the US dollar. The proposal came after Circle's decision to freeze USDC at sanctioned Tornado Cash addresses.

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