Circle CEO Jeremy Allaire on July 2 posted a Twitter thread responding to unfounded allegations that Circle is floundering amid the difficult market situations.
In debunking the claims, Allaire mentioned Circle is within the “strongest place it has ever been in financially.” Commenting on the latest MiCA framework, during which EU lawmakers agreed to implement inflexible new guidelines for stablecoin issuers, Allaire mentioned he welcomed the transfer, including that it’s going to present much-needed client confidence in “issuers like Circle.”
8/ Circle is within the strongest place it has ever been in financially, and we’ll proceed to extend our transparency. FWIW, we’re additionally inspired by rising regulatory frameworks for stablecoin issuers, which ought to assist additional enhance confidence in issuers like Circle.
— Jeremy Allaire (@jerallaire) July 2, 2022
Circle boss addresses allegations
Just lately, FUD surrounding Circle has been mounting. For instance, on June 18, the founding father of the Each day Gwei e-newsletter, Anthony Sassano, mentioned Circle can freeze USDC “in any tackle at any time for no matter cause.”
Allaire mentioned Sassano’s claims had been inaccurate and unhelpful FUD, referring observers to a weblog submit dated Might 2022, which primarily disclosed that legit customers don’t have anything to concern.
Quick ahead to now, and in addressing recent allegations that each one isn’t nicely at Circle, Allaire posted a collection of hyperlinks to weblog posts addressing points to do with transparency, audits, and liquidity.
Allaire mentioned he understands that some might really feel paranoid “given the historical past of hucksters in crypto.” However he assured customers that Circle holds itself to the very best requirements.
Allaire says we’ve got zero points
The spark for Allaire’s tweet thread was the emergence of unfounded claims that Circle is “at main threat” of defaulting.
Twitter person @CryptoInsider23 made the claims primarily based on Circle’s SPAC IPO filings, concluding that “one thing dirtier [is] occurring beneath.”
Circle’s USDC scheme is on the point of collapse. In case you learn their SPAC IPO filings its clear they’ve been shedding cash always however theres one thing dirtier occurring beneath. They’re at main threat on defaulting on USDC reserves. A deep dive 🧵 on USDC. 👇 pic.twitter.com/GgN5oeD7gO
— Geralt Davidson (@CryptoInsider23) June 29, 2022
@CryptoInsider23 alleged that Circle’s incentives mannequin results in losses, that are paid for by capital raises. And that the corporate is “on monitor to lose 1.5B in 2022.”
It’s additionally alleged that customers’ USDC deposits are dealt with just like how banks do fractional reserve banking and lent out through an offshore Bermuda-based firm, to flee U.S. regulatory oversight.
In response, Allaire mentioned Circle is over-collateralized and USDC is barely lent to accredited buyers, (presumably through official means). He signed off the tweet saying the corporate has “zero points.”
7/ On the final level re: Circle Yield, we’ll share a weblog submit this week, however the essence is that as a result of Circle Yield is regulated, over-collateralized, supplied as a safety to solely accredited buyers, and has a really conservative UW strategy, we’ve got had zero points.
— Jeremy Allaire (@jerallaire) July 2, 2022
