Blockchain finance firm Reaper Financial used an altcoin project, Ripple (XRP), which is also a favorite of Turkish crypto investors, as a solution after the USDC de-peg incident. Meanwhile, Bloomberg Intelligence analyst Elliott Z. Stein awaits a first-half verdict in the Ripple and SEC case.
Reaper Financial uses Ripple as solution in USDC de-peg
Reaper Financial, an Austin, Texas-based blockchain finance firm specializing in the purchase and burning of digital assets, has announced that it has changed the USDC in its Permanent DRIP Fund to XRP following the USDC de-peg incident. The company stated, “Due to a possible de-peg, USDC in the Permanent DRIP Fund has been converted to XRP until stabilization is achieved. We will update it as the situation evolves,” he explained.
cryptocoin.comA recent tweet from USDC issuer Circle revealed that $3.3 billion of its $40 billion USDC reserve is held by the troubled Silicon Valley Bank (SVB). Additionally, the Bank is one of six banking partners of Circle that it employs to manage roughly 25% of its cash-based USDC reserves.
As a result of investor redemptions, the USDC stablecoin no longer has a dollar stablecoin. Investors cashed out close to $8 billion worth of USDC from controlled exchanges the previous day. USDC is trading at $0.919 at the time of writing and remains below the dollar peg. Stablecoins DAI, USDD and FRAX were also trading below the dollar peg at the time of writing. According to Nansen, Circle has burned $2.34 billion in USDC in the last 24 hours. About 70%, or $1.65 billion, was lost to incineration in the previous eight hours.
In response to the latest situation, the stock markets also took precautions. Due to the market situation, Binance has stopped performing automatic conversions from USDC to BUSD. Over the weekend, cryptocurrency exchange Coinbase has chosen to halt USDC:USD conversions. Meanwhile, according to Ripple CTO David Schwartz, the business planned to make an official statement in response to inquiries about whether it had any contact with the troubled SVB.
A decision in the Ripple and SEC case is expected in the first half of the year
Bloomberg Intelligence analyst Elliott Z. Stein recently discussed the ongoing legal dispute between Ripple and the US Securities and Exchange Commission (SEC) on Laura Shin’s ‘Unchained’ podcast. He said he expects a decision on summary resolutions in the first half of this year. Stein pointed out that the Ripple example is particularly intriguing. Because it contains a beneficial digital asset that supports the idea that such assets should be treated like commodities.
Still, according to the SEC, Ripple declared XRP tokens as investments and buyers treated them as such in the hope that the value of the asset would increase. As a result, a complex legal issue led to protracted lawsuits. “So it’s a really interesting situation for the entire crypto industry, and I think we can make a decision on summary resolutions in the first half of this year,” Stein said.
In a recent ruling on the case, Judge Analisa Torres decided to prevent the SEC’s pivotal expert from testifying. Judge Torres denied a request to testify after learning that Patrick Doody had been commissioned by the powerful regulator to investigate the prospects of token buyers.
The Securities and Exchange Commission (SEC) filed a lawsuit against Ripple and its top executives in December 2020. According to the lawsuit, the company and its directors sold securities without authorization, in violation of US securities regulations. Ripple CEO Brad Garlinghouse said he expects the case to be resolved in 2023.
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