The CEO of USD Coin (USDC) issuer Circle says that crypto exchange FTX’s liquidity issues bear no significant impact on the stablecoin company.
Jeremy Allaire says that Circle provides services to both FTX and Alameda Research, the quantitative crypto trading firm founded by FTX CEO Sam Bankman-Fried.
“Circle has no material exposure to FTX and Alameda. FTX has been a customer of Circle Payment APIs for the past 18 months, providing card and ACH services for customer transactions. Circle’s crypto payments beta product uses FTX and other exchanges, for BTC/ETH liquidity.”
He clarifies that his company is not affected by the troubles afflicting the Bahamas-based exchange.
“Circle has never made loans to FTX or Alameda, and has never received FTT as collateral, and has never held a position in or traded FTT. In any case, Circle does not trade on its own account.”
Allaire says that Circle holds just a tiny equity with FTX as it does with a number of other crypto exchanges.
“Circle is a tiny equity holder of FTX, and FTX is a tiny equity holder of Circle. Circle is also a tiny equity holder of Kraken, Coinbase and Binance US. One hundred percent of USDC flows from Circle to FTX or Alameda are responsive to our ToS and automated systems of 1:1 dollar settlement to mint USDC and redeem USDC.”
As fear and uncertainty surround USDC amid the downturn, Allaire says that Circle is holding itself to very high standards of transparency, audit and risk management. He cites that 80% of the USDC reserves are held in US treasury bills and in custody with BNY Mellon. He says the firm’s cash reserves are also held in several, fully segregated bank accounts.
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The post Circle CEO Jeremy Allaire Says Stablecoin-Issuer Not Affected by Troubles at Crypto Exchange FTX appeared first on The Daily Hodl.