Key Takeaways:
- USDC market cap loses $2bn in the last 30 days.
- Tornado Cash (TORN) plunges 50% in the last 14 days.
LAGOS (CoinChapter.com) — The recent sanctions against cryptocurrency mixer Tornado Cash seem to benefit Tether’s USDT as the stablecoin market capitalization soared significantly in the last seven days.
In detail, data from Coingecko revealed that the market cap of the largest stablecoin has increased by almost $2 billion. The token market cap rose from $65.8 billion on Aug. 8 and, at the time of publication, stands at $67.8 billion.
Tether’s USDT growth comes after a turbulent period that began in May with the collapse of TerraUSD and LUNA. However, the stablecoin has since reversed a three-month downtrend and is en route to restoring its lead as the top stablecoin in the crypto space.
Notably, Tether’s USDT rise follows the United States Treasury Department’s sanctions on Tornado Cash.
Recall that the government this week sanctioned the crypto mixer for helping hackers launder over $7 billion worth of cryptocurrency. The government accused the mixer of allowing cybercriminals, including North Korean hackers, of using its platform to launder criminal proceeds.
The U.S. government also blocklisted 44 USD Coin (USDC) and Ethereum addresses linked to the protocol. Notably, Tornado Cash sanctions came on Aug. 8 same day that Tether’s USDT uptick began.
Users Ditching USDC For Tether’s USDT
Following the sanction, several crypto exchanges flagged and barred the 44 addresses identified by the U.S. government. Circle, the issuer of USDC, went further by freezing assets linked to the addresses flagged. Notably, Circle froze 75,000 USDC worth of funds linked to the accounts in question.
The move, however, hurt the stablecoin platform as several users were reportedly moving their assets from USDC to USDT. According to reports, USDC users moved about $1.6 billion worth of assets to USDT following the sanction.
“Looks like roughly $1 billion shifted from USDC to Tether’s 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.”
Another Twitter user posited.
However, it is important to note that Circle sanctioning the addresses was necessary due to the possible consequences if it continues to interact with the addresses. Notably, punishment for non-compliance usually ranges from fines of $50,000 to $10,000,000 and 10 to 30 years imprisonment.
USDC Market Cap Loses $2B
Meanwhile, due to the recent developments, USDC’s market cap has lost almost $2 billion in the last 30 days. In addition, data from Coingecko indicates that the stablecoin market cap dropped from a high of $55 billion on July 28 to $53 billion at press time.
Moreover, due to the drop, Tether’s USDT could extend its dominance as the top stablecoin by almost $15 billion. Notably, the entire stablecoin currently stands at $154 billion with a trading volume of $63.4 billion.
In a parallel development, the Tornado Cash governance token (TORN) has also plummeted by 50% in the last 14 days.
The ERC20-based token was down by 5% on the day, trading around $12. TORN market cap has dropped significantly and now sits at $19 million with a 24-hour trading volume of $11 million. It also has a circulating supply of 1.5 million TORN tokens and a total supply of 10 million.
