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The market capitalization of Tether (USDT) is finally on the uptrend after nearly three months in an opposite direction.
Following recent sanctions of the US Department of Treasury against crypto mixer Tornado Cash, there may be at least one positive to draw from the action, the market capitalization of Tether (USDT) is finally on the uptrend after nearly three months in an opposite direction.
Tornado Cash Sanction: Tether (USDT) Market Cap Surges but USDC Drops
Since August 8, when The Office of Foreign Asset Control (OFAC) officially restricted Americans from using Tornado Cash, Tether (USDT) market cap has gained over $2 billion. At the time, OFAC claimed that Tornado Cash was being used by bad actors and criminal organizations. Furthermore, it says these organizations have laundered no less than $7 billion worth of cryptocurrency in just about two and a half years. And one very well-known group of hackers that may have used Tornado Cash to launder funds is the North Korean Lazarus Group.
OFAC also flagged about 44 addresses belonging to the USD Coin (USDC) and Ethereum (ETH) networks. It says those addresses are somehow connected to some people of interest. So, complying with the restrictions, Circle – the USDC issuer, immediately froze assets linked to the addresses. That is about 75,000 USDC, as Circle looks to avoid potential troubles that may arise from non-compliance. The assets freeze also brought about a significant drop in value for the USDC. Its market cap has lost roughly $2 billion over the past month.
Correlation between USDC and USDT?
It is interesting to note that there appears to be a correlation between the USDC stablecoin and Tether’s USDT that may be more than a mere coincidence. While USDT’s market cap has gained $2 billion, the market cap for USDC lost the same amount. And market participants are keen on finding a connection between the two. As a Twitter user noted, about $1.6 billion worth of USDC may have been transferred to USDT after the Tornado Cash sanctions.
Notably, however, Tether is yet to freeze the addresses flagged by OFAC and it remains unclear if it ever will.