Circle apparently thinks Tron isn’t up to snuff. On Wednesday, the major stablecoin issuer announced it will cease minting on the layer-1 blockchain effective immediately — the first move in a “phased transition” to completely vacate the network founded by Justin Sun, who faces legal challenges in the United States.
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“As part of our risk management framework, Circle continually assesses the suitability of all blockchains where USDC is supported,” the company wrote in a statement. It added the decision came after an “enterprise-wide” effort to “ensure that USDC remains trusted, transparent and safe.”
The move may come as a surprise to some given that Tron, known for its comparatively low fees and quick settlement times, is home to a booming stablecoin business.
Since at least 2021, there has been more tether {{USDT}} on Tron than on Ethereum, driven by the popularity of using Tron-based USDT to move funds between exchanges and growing use for consumer purchases in developing markets.
Circle hasn’t said much about its “enterprise-wide” review, apparently involving the company’s compliance and corporate divisions. It is not clear, for instance, whether this is a reactive move involving Tron-related security concerns, or a preemptive move meant to get ahead of potential legal hangups involving Tron and its celebrity founder Sun, 33.
Pulling up the drawbridge between Circle and Tron may be the latest sign of a growing divide between regulatory-compliant crypto firms (or at least those that signal compliance friendliness) and black, or gray, market crypto use. Binance, for one, sued by the Department of Justice, delisted USDC some years ago, without clear explanation.
See also: Crypto ‘Gray’ Markets Could Be Unintended Consequence of FATF Travel Rule
The lines in the sand between white, gray and black market uses are not fully clear, and ever-shifting. But indications of this are everywhere, including Coinbase and Kraken’s unprompted decisions to delist privacy coins, or the rising number of know-your-customer (KYC) requirements meant to improve surveillance of crypto flows.
Saying Justin Sun is a…
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