USDC cancels trading with Circle confirming $3.3 billion remains stuck with Silicon Valley bank

After the USDC issuing circuit revealed that it could not withdraw $3.3 billion of the $40 billion Silicon Valley Bank (SVB), the resulting sell-off caused the stablecoin’s price to drop below the $1 mark.

On March 9, Circle initiated a wire transfer to remove its funds from the SVB as the Federal Deposit Insurance Bank was about to close operations. However, two days later, on March 11, Circle confirmed that the wire transfers had not been fully processed and $3.3 billion in USDC reserves were still with SVB.

Data from Cointelegraph Markets Pro and TradingView shows that USDC prices fell immediately after the discovery, as shown below.

At the time of writing, USDC has lost more than 10% of its value as it was trading at $0.8774. According to Dante Disparte, Chief Strategy Officer and Head of Global Policy at Circle, the SVB is critical to the US economy and warned that “its failure — without a federal bailout — would have broader ramifications for businesses, banks and entrepreneurs.

Disparte further added:

“As with Silvergate, our teams worked quickly to limit any exposure to the banks. This includes a wire transfer request made prior to the FDIC custody of SVB. There remains $3.3 billion in cash exposure – but we are following state and federal regulatory guidance.”

More data on the series reveal That department recovered US$1.4 billion net within 8 hours. In an effort to reduce exposure, crypto firms including Coinbase and Jump Trading have recovered nearly $850 million and up to $138 million in USDC.

Related: BREAKING: Circle discloses $3.3 billion held in Silicon Valley bank

Just two weeks ago, on February 23rd, the USDC Issuance Department announced plans to increase its headcount by 25% – reversing the trend of ongoing layoffs.

During the timeline, Circle’s chief financial officer, Jeremy Fox-Gene, shared their intent to go public, but planned to wait for better market conditions. He added that the cryptocurrency industry needs more distance from the Terra and FTX explosions for public market investors to reassess the future of the digital asset business.