In the latest crypto news, Binance and OKX, two prominent cryptocurrency exchanges, announced separate blog posts on Thursday that they had suspended support for the Solana versions of two of the largest stablecoins, Circle’s USDC and Tether’s USDT.
Both exchanges did not explain why there was a halt in support, which caused confusion in the crypto industry. Users of the trading platform were told to be unable to deposit the tokens “until further notice.”
Jeremy Allaire, CEO of Circle, responded in a tweet that USDC on Solana, which is issued natively by Circle, is operational. Allaire stated, “USDC on Solana is natively issued by Circle and is functioning fine. Not clear what the motivations are for exchange actions, which are disappointing.”
Polo Ardoino, CTO of Tether, added to the response stating, “USDt on solana issued directly by Tether. Just speculating, but could be that exchanges are seeing too much connection between FTX and Alameda and Solana. There is a lot of tension.”
Finally, in an official statement by Circle, it claimed, “USDC on Solana is operating as expected and there are no issues with issuing or redeeming USDC. USDC is always redeemable 1 for 1 for US dollars. Any amount. Any time. For Free. Always.”
Mass Confusion
Binance has since resumed USDT deposits on Solana, according to a new blog post from the exchange. Like Binance, OKX revised its announcement, stating that it had halted support for the two tokens rather than delisting them.
State of Solana
Tether and USD Coin rank third and fourth in terms of market capitalization, respectively. Tether became the first stablecoin to launch on Solana in September 2020. Back then, the leading “Ethereum killer” blockchain was a relatively unknown blockchain. A month later, Circle’s USDC was moved to the Solana blockchain.
Solana is one of the largest blockchains and has deep ties to Sam Bankman-imploded Fried’s crypto empire. FTX and Alameda Research were key investors, and it appears to be weighing heavily on Solana’s ecosystem.
The rapid demise of FTX reflected negatively on the entire Solana ecosystem. During the ongoing crisis, Solana-based decentralized applications have bled $700 million in funds. The Solana Foundation clarified last week that it had $1 million in cash or cash equivalents stored on the now-perished exchange. It cannot access these assets because they are stuck on the platform.
The supply of Solana-USDC is 62% greater than the supply of Solana-USDT, according to on-chain data. At the time of writing, the total amount of USDC circulating on Solana is $5 billion USDC or 11% of the token’s total market capitalization.
