USDT market cap up by $2 billion following Tornado Cash debacle

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The market capitalization of Tether (USDT) tokens has elevated by practically $2 billion for the reason that U.S. Treasury Department imposed sanctions on cryptocurrency mixer Twister Money.

The Workplace of Overseas Asset Management basically barred People from utilizing Twister Money on Aug. 8, blacklisting 44 USD Coin (USDC) and Ether (ETH) addresses related to the service to an inventory of Specifically Designated Nationals and Blocked Individuals (SDN).

OFAC alleges that Twister Money was utilized by people and legal organizations to launder over $7 billion price of cryptocurrency since 2019. Funds linked to North Korean Lazarus Group hackers are additionally believed to have been combined via Twister Money.

Circle, the issuer of stablecoin USDC, went as far as freezing assets linked to the 44 addresses flagged by OFAC. The transfer by Circle was warranted, given the potential ramifications of continuous to work together with the addresses.

Penalties for noncompliance vary from fines of $50,000 to $10,000,000 and 10 to 30 years imprisonment. Circle froze 75,000 USDC price of funds linked to the accounts in query in an effort to be totally compliant with the Treasury ruling.

Apparently, the market cap for USDC has declined by some $2 billion from highs of round $55 billion over the previous month to its present capitalization of round $53 billion. The USDC decline has been famous by varied cryptocurrency market members on social media, with a correlation being drawn between the decline of the USDC market cap and the increase in the capitalization of USDT.

One consumer on Twitter urged that customers transferred round $1.6 billion price of USDC to USDT following the Twister Money sanctions:

Paolo Ardoino, the chief know-how officer of Tether and cryptocurrency trade Bitfinex, additionally teased the “flipping” of USDC-USDT on Twitter. Each USDC and USDT have the flexibility to freeze funds via Ethereum good contract performance — but the previous was the one issuer to announce asset freezes on the blacklisted addresses.

Cointelegraph has reached out to Tether to determine whether or not it intends or is anticipated to freeze USDT held by the blacklisted addresses linked to Twister Money. 

Each Circle and Tether have additionally assuaged the broader cryptocurrency neighborhood that both stablecoin platforms would support Ethereum’s upcoming Merge to its proof-of-stake Beacon Chain, which is touted to happen in September.