Cryptocurrency change Crypto.com wrote to prospects right this moment in an electronic mail seen by Decrypt to inform them that every one deposits and withdrawals for Tether’s USDT and Circle’s USDC have been suspended on the Solana community.
The pause is efficient instantly, however the electronic mail didn’t clarify why the change selected to droop these transfers.
The 2 stablecoins, USDT and USDC, exist on nearly each blockchain, and the suspension solely applies to customers seeking to transfer both asset on Solana. “You might withdraw USDC and USDT at any time utilizing different supported networks, together with Cronos and Ethereum,” the e-mail to Crypto.com prospects learn.
Crypto.com is a Singapore-based crypto platform that lets customers purchase and promote cryptocurrencies. The agency additionally has a local blockchain referred to as Cronos, upon which greater than 75 totally different crypto apps exist, in response to DeFi Llama.
The corporate has not but responded to Decrypt‘s request for remark.
Crypto.com provides to market chaos
The crypto platform’s announcement comes amid one of many extra chaotic weeks in crypto historical past, which reached an apex after Sam Bankman-Fried of FTX tentatively agreed to promote his change to competitor Changpeng “CZ” Zhao of Binance.
On Sunday, CZ introduced that the agency would start promoting its stake in FTT tokens, FTX’s native change token, that it had earned as a part of its fairness exit from FTX.
The proposed sale not solely tanked the value of FTT but additionally apparently spooked FTX purchasers, who rapidly started pulling funds from the change. As withdrawals escalated, Bankman-Fried then introduced the potential acquisition ensuing from the “liquidity crunch,” suggesting that the agency didn’t have 1:1 reserves of buyer belongings.
Following the information, crypto companies scrambled to distance themselves from the troubled crypto change.
Amongst them was Crypto.com’s CEO Kris Marszalek said the agency’s “direct publicity to FTX meltdown is immaterial: lower than $10 million in our personal capital deposited there for patrons’ commerce execution.”
Apart from FTX’s woes, Sam Bankman-Fried additionally has deep ties with the Solana ecosystem.
Alameda Analysis, an algorithmic buying and selling agency based by Bankman-Fried, participated in a $314 million fundraise for Solana Labs, Solana’s growth staff. FTX and Alameda additionally launched Serum, a preferred decentralized change constructed atop the speedy layer-1 blockchain.
Thus, alongside FTT, the value of SOL has additionally tanked as traders proceed to scramble. The token has plummeted by 48% within the final 24 hours and is now buying and selling arms at just below $15.
Previously, amid excessive volatility and excessive congestion, Solana has buckled, reporting a number of events when the community got here to a standstill. Solend, a lending and borrowing platform on Solana, has been unable, as an illustration, to execute liquidations resulting from this congestion.
The highest of the platform’s web site reads: “Solana is at the moment congested with oracle updates being intermittent, customers may face points with withdrawing. All debtors are disabled.”
Such a congestion might very effectively ramp up once more within the subsequent few hours. Validators on Solana, the entities that confirm Solana transactions as legitimate and are rewarded in SOL for doing so, are anticipated to unlock roughly $1 billion in SOL tokens. If these tokens are then bought on the open market, it might add additional downward stress to the value of SOL, in addition to additional stress on the Solana blockchain.
The views and opinions expressed by the creator are for informational functions solely and don’t represent monetary, funding, or different recommendation.