Circle CEO Jeremy Allaire has warned about the risks facing the crypto market due to exposure to the U.S. Dollar and the regulatory risk in the U.S. financial system.

In a March 23 Twitter thread, Allaire said there “seems to be a large-scale risk-off from USD that is exposed to US banks and US regulatory risk.”

The CEO stated that there is general market anxiety revolving around the large-scale failure of the US banking system and the aggressive regulatory actions on crypto.

He noted the irony of companies with the highest level of compliance with US regulations and are most integrated with the banking system facing issues. This group is currently considered unsafe due to concerns about assets being stranded.

Allaire added that a macro risk was also driving rotation from USD into flagship digital assets — Bitcoin and Ethereum

Calls for regulation

The Circle CEO urged U.S. policymakers to be careful about their next steps.

He noted that their actions have started forcing market participants out of the U.S. into poorly regulated jurisdictions with higher risks and lax controls.

As such, Allaire said that the current situation calls for a “clear, coherent and pragmatic policy” if the U.S. does want to lose its position as a leader in the blockchain technology space.

USDC remains strong

Meanwhile, Allaire noted that Circle would continue to operate within the regulatory framework and comply with the highest standards and transparency.

He added:

“USDC has not missed a beat, we have never failed to mint or redeem USDC for $1, including during the past weeks stress test. As of last week, in the past year, we have redeemed $192.4B USDC at $1, and issued $176.9B at $1.”

The CEO also stated that Circle is adding new transit and settlement banking partners to ensure that it can process issuance and redemptions of digital dollars 24/7 and throughout the year.

Stablecoin issuer Circle has warned its community about a fake USD Coin (USDC) airdrop on the Twitter account of its chief strategy officer and head of global policy, Dante Disparte.

In a March 22 statement, Circle wrote that any links to offers were scams, adding that a scammer took over Disparte’s account. CEO Jeremy Allaire corroborated the firm’s statement.

Circle added that:

“We are investigating the situation and taking action accordingly.”

Hacked account used to promote fake USDC compensation

Disparte’s hacked account was used to promote a fake USDC airdrop that the scammers said would be a “one-time bonus” for holders of the stablecoin during the depeg.

The malicious player linked to a phishing website designed to steal crucial data or tokens of unsuspecting individuals.

Part of the message tweeted by the hacker includes:

“We are pleased to announce that we will be distributing a one-time bonus of USDC to all existing holders. This bonus is our way of thanking you for your continued support and trust in USDC… We know that stability is key when it comes to digital currencies, and we are committed to doing everything in our power to maintain the stability of USDC.”

It was unclear if Disparte had gained control of the account as of press time because some of the hacker’s tweets had been deleted.

Earlier in the month, USDC lost its $1 peg after a banking crisis that led to the failure of crypto-friendly banks like Silicon Valley Bank and Signature Bank.

While the stablecoin has since regained its peg, crypto investors’ confidence in USDC remains low. Its supply has declined by around 15% in the last 30 days, according to CryptoSlate’s data.

Source: Dune Analytics

Source: Santiment