Tether market cap nears $70B as SEC crypto crackdown hurts stablecoin rivals

The US Securities and Alternate Fee (SEC) plans to sue Paxos for issuing and itemizing its Binance USD (BUSD) stablecoin, benefitting its top-rival, Tether (USDT), whose market capitalization has risen to multimonth highs. 

BUSD market cap drops by $2 billion

The SEC claims that BUSD, a U.S. dollar-backed stablecoin, is a safety, noting that Paxos has violated investor safety legal guidelines by white-labeling it.

Associated: Paxos ‘categorically disagrees’ with the SEC that BUSD is a safety

Since Feb. 13, when the information broke, the BUSD market cap has misplaced roughly $2 billion, all the way down to round $14 billion as of Feb. 16 — the bottom since January 2022. 

BUSD circulating provide. Supply: Messari

As Cointelegraph reported, Binance has seen its withdrawals and BUSD redemptions surge post-Paxos crackdown.

USD Coin market cap downtrend continues

On the identical time, USD Coin (USDC), the second-largest stablecoin by market capitalization, has additionally witnessed capital outflows in response to the SEC crackdown information. Its provide decreased from $41.29 billion on Feb. 12 to as little as $40.99 billion on Feb. 14.

Nonetheless, this determine rebounded to $41.30 billion on Feb. 15 after Circle clarified that it had not acquired any lawsuit risk from the SEC.

Regardless of latest inflows, USDC’s market cap stays in a common downtrend since its June 2022 peak of $56 billion — a 25% decline over the previous eight months.

Tether dominance jumps, market cap rises over $69 billion

The regulatory crackdown on U.S.-based stablecoin corporations has been a boon for prime stablecoin Tether, whose market cap has jumped over $69 billion.

Knowledge exhibits that almost $890 million of inflows since Feb. 12 has pushed Tether’s market dominance to 51.25% as of Feb. 15.

USDT circulating market cap. Supply: Messari

The soar doubtless means that traders have been spooked by the crackdown on BUSD and sought security in Tether USDT. Tether is owned by Hong Kong-based iFinex, which additionally owns the Bitfinex cryptocurrency trade.

Associated: USDT vs. USDC vs. BUSD: What are the similarities and variations?

Investigators have lengthy tried to uncover the accounting behind Tether to show that its circulating USDT provide will not be 100% backed by the greenback (and even a mixture of different cryptocurrencies, treasury payments, cash market funds and different property) because it claims.

Tether has repeatedly denied the accusations and gives common assurance opinions signed by third-party accounting firms each quarter.

Tether Reserves breakdown. Supply: Tether.to

The most recent report from Dec. 31, 2022, states that consolidated property amounted to at the very least $67 billion, exceeding consolidated liabilities by at the very least $960 million.

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