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Jeremy Allaire, CEO of Circle Internet Financial, blames the shrunken value of the company’s stablecoin, USD Coin, on regulatory challenges in the United States and concerns about its banking system.

Allaire said investors’ desire to “de-risk out of the U.S.” is contributing to a fall in the market value of USDC during an interview on Bloomberg Television on Wednesday.

USDC remains one of the crypto sector’s most relied-upon stablecoins, but close ties to the U.S. have seen it lose ground in key metrics lately. The Block Research’s data indicates that the total supply of USDC in the market has fallen by roughly $10 billion since the start of the year to its current level of just above $30 billion. Meanwhile, the supply of rival USDT has gained ground to reach a total supply of $82.5 billion.

“We are seeing a huge amount of concern globally about the U.S. banking system,” Allaire, told Bloomberg. “We are seeing concern about the regulatory environment in the U.S.”

Circle got caught up in the U.S. banking crisis earlier this year when it disclosed that it had $3.3 billion in reserves — part of the capital that backs up the value of its stablecoin — stored with Silicon Valley Bank, the ill-fated lender. USDC, which is supposed to be pegged to one U.S. dollar, briefly fell in value to as little as $0.88 before recovering a few days later.

SVB’s collapse came soon after two crypto-friendly banks in the U.S. — Silvergate Bank and Signature Bank — were shut down by regulators, leaving precious few banking options for startups in the space.

Only a week after the SVB episode, Circle announced that it had applied for a French crypto asset license as part of a plan to put down deeper roots in Europe.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Merlin, a decentralized exchange using zkSync, was reportedly hacked for more than $1.82 million immediately after receiving a code audit from smart-contract auditor Certik.

Certik tweeted that it is investigating the incident, and that its initial findings suggest a potential issue with private key management — not necessarily a code exploit.

“While audits cannot prevent private key issues, we always highlight best practices to projects,” Certik said. “Should any foul play be discovered, we will work with the appropriate authorities and share relevant info. Stay tuned for updates.”

Merlin did not immediately respond to a request for comment.

This story is developing and will be updated.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

ALSO: CoinDesk’s Pete Pachal and Daniel Kuhn outline important themes at Consensus 2023 conference, which opens Wednesday in Austin, Texas.

Funds structured as stablecoin issuer Circle’s Blackrock-managed USDC reserve fund “generally will be deemed ineligible” for the New York Federal Reserve’s reverse repurchase program under the new rules.

BTC climbed Tuesday afternoon as Google and Microsoft’s first-quarter earnings surpassed expectations. Both equities and Treasury yields were down on Tuesday, however.

Two former congressmen are heading back to Washington to spearhead a non-partisan effort to talk up the benefits of bitcoin. 

Former representatives Tim Ryan of Ohio and David McIntosh of Indiana will chair BPI Action, an effort tied to the Bitcoin Policy Institute that aims to “educate policymakers and the public about the economic and social benefits of Bitcoin and other digital innovations.” 

The 501(c)4 organization will be unveiled at the institute’s Bitcoin Policy Summit in Washington on Wednesday. 

“Traditional financial services have left a number of communities behind and without proper guardrails that encourage innovation. Bitcoin and other digital innovations can bring more underserved communities into financial inclusion,” Ryan, a Democrat who worked on crypto-specific legislation during his time in office, said in a statement shared first with The Block. “They can also encourage the development of alternative energy sources creating more American jobs.” 

BPI Action will join other crypto groups already in Washington, including the Blockchain Association, which just signed its 107th member, and the DeFi Education Fund. The Bitcoin Policy Institute supports academic research on Bitcoin and other “emerging monetary networks.” 

Congress eyes new rules for crypto

The new BPI Action group comes as Congress eyes new rules for cryptocurrency. Republicans recently proposed draft legislation as lawmakers weigh how to regulate stablecoins, and a broader, bipartisan bill that would set rules for the wider industry is also in the works. 

Meanwhile, key U.S. regulators like the Securities and Exchange Commission and the Commodity Futures Trading Commission have ramped up oversight of major firms like Kraken, Coinbase and Binance. 

Next month, Ryan and McIntosh will take their Bitcoin policy show on the road to Miami for the Bitcoin 2023 conference. Ryan, the group’s chair, gave up his House seat when he ran unsuccessfully for Senate in the 2022 election cycle. McIntosh is the president of the conservative Club for Growth, which deployed a pair of crypto-focused super PACs during the last election.

Bitcoin Policy Institute co-founders Grant McCarty and David Sell said they hope the new group will “facilitate fact-based conversations around Bitcoin.”

We believe it will help policymakers and the public have a more honest conversation about the benefits to US-led innovation in this space,” McCarty and Zell said.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

FTX.US last purchased Ledger Holdings, the parent company of LedgerX, for $298 million in October 2021, according to audited financial documents viewed by CoinDesk.

FTX’s debtors agreed to sell derivatives exchange LedgerX to an affiliate of Miami International Holdings for about $50 million. 

The deal to M7 Holdings needs to be approved by the U.S. bankruptcy court overseeing FTX’s proceedings. A sale hearing to OK the deal is scheduled for May 4. 

FTX secured approval early this year to sell business units to raise money for creditors. It is also looking to sell Embed Financial Technologies, FTX Japan and FTX Europe. About 117 parties have shown interest in buying entities of FTX, according to a legal filing at the start of this year.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Joseph Seibert, formerly head of its digital assets at Signature Bank, has brought over part of his risk and compliance team and a blockchain payments specialist.

The co-founder and president of news site nft now, a speaker at this year’s Consensus, discusses why Web3 has a mental health problem and the future of tokenized media.