The moves to burn USDC in bulk from Circle, the issuer of this stablecoin, are causing concern in the crypto community after it was reported that the US was stepping up legal action against the stablecoin array.
According to Peckshieldstablecoin USDC is recording a lot of unusual activity when there are continuous mint-burn token transactions in large quantities.
Specifically, in the last 24 hours, a wallet address has continuously withdrawn 4.7 billion USDC from Coinbase exchange, then transferred it back to the wallet address of Circle, the USDC issuer. Circle then transfers the stablecoin to a burn address and is burned.
#PeckShieldAlert ~4.7B $USDC have been burned @Circle #Coinbase within the last 24 hourshttps://t.co/L079B3H8LM pic.twitter.com/5QxWGFUCJj
— PeckShieldAlert (@PeckShieldAlert) February 10, 2023
In the above chain of transactions, the address 0xad4ac4eb660d2b2d78a062bf136610af15defd80 is a transit point for USDC between Coinbase and Circle. This wallet has been operating for a long time and processes transactions steadily. However, the volume of circulation has increased suddenly in the past 1 day.
Crypto market data aggregator 0xWatcher asserts that Coinbase received up to 4.7 billion USDC in the same time period, so the above series of transactions is unlikely to be institutional investors deciding to switch. USDC is back to USD and shows no signs of worrying.
🚨Although it seems @coinbase processed a ~$4.5B $USDC burn it also received a similar amount (~$4.7B).
The net USDC flow of this @coinbase address is +$330M in the past 24H.
Steady lads. https://t.co/L1VRAKU1FQ pic.twitter.com/JIKPs3io6X
— 0xScope (🪬 . 🪬) (@ScopeProtocol) February 10, 2023
According to data from CoinMarketCap and CoinGecko, the USDC supply remained hovering around $41.4-$41.7 billion in the last 24 hours with no fluctuations of up to $4 billion. USDC price is also stable at 1 USD.
USDC supply peaked in June 2022 at more than $55 billion, then gradually decreased in the second half of 2022 following the chain collapses in the market to the current $41.5 billion region.
The time when Circle makes these USDC transfers is quite “sensitive” when this morning, another stablecoin issuer, Paxos, was reported to be investigated by the New York government for an undisclosed reason. .
On the other hand, there is a theory that these transactions are only for testing Cross-Chain Transfer Protocol (CCTP), the blockchain bridge solution being tested by Circle on Ethereum and Avalanche, scheduled to launch in Q1/2023.
Synthetic Kyptos
