World’s biggest crypto exchange by trading volume, Binance, has responded to the drama surrounding its rival USDC by converting its $1 billion Industry Recovery Funds into Ethereum, and Bitcoin, among other cryptocurrencies.
Binance introduced the Industry Recovery Funds initiative last November to help crypto projects affected by FTX’s crash handle their liquidity troubles.
The move to convert the $1 billion worth of BUSD is also fueled by a lawsuit against the stablecoin issuer Paxos. Last month, US Securities and Exchange Commission (SEC) accused the company of violating investor protection policies. Following the charges, Paxos announced ending its association with Binance.
It’s not clear how much of the funds have been converted so far into the mentioned crypto assets, but an ETH address shared by Binance CEO Chanpeng Zhao Monday shows multiple transactions over the past 20 hours. The wallet was almost empty at press time, with only 0.0518 ETH remaining.
USDC Loses Its US Dollar Peg
Binance decision to convert its remaining balance of BUSD comes a few days after USDC depegged from its expected $1 price.
The depegging incident was driven by the current crisis surrounding the downfall of the Silicon Valley Bank, where the stablecoin’s issuer Circle holds over $3.2 billion.
A few hours after Circle had announced exposure to the bank, investors started selling their USDC bags, causing the token to reach a new all-time low of $0.88.
On Saturday, the stablecoin issuer released a statement claiming it would explore any possible means to cover the shortfall resulting from the funds stuck in Silicon Valley Bank.
US Authorities’ Joint Statement and Its Impact on Crypto Market
On the positive side, Circle could be out of the woods based on the joint statement released by the Fed, Federal Deposit Insurance Corporation, and US Treasury, which suggested that all depositors of Silicon Valley Bank will start receiving their funds this week.
Further, the statement helped the wider crypto market turn green, with Bitcoin and Ethereum currently changing hands for $24,327 and $1,675, respectively. Also, USDC is almost regaining its dollar peg. The stablecoin is trading at $0.9971, according to data from CoinGecko.