Coinspeaker
Circle Announces Closure of Individual Consumer Accounts on November 30
In a strategic move to review its relations with customers, Circle, a leading and regulated stablecoin issuer, informed its individual account holders that they will not be serviced by the end of this month. Circle wrote an email to its individual customers informing them to redeem their coins before November 30, as only institutional and business account holders will be serviced. The company highlighted that the recent action to close individual accounts is consistent with its specific terms in the applicable legal agreement.
As a result, account holders without active balances are not required to take any further actions but can still reach out to customer care directly for further assistance. According to the Circle email shared by an X platform user Evanss6, the company could be cracking down on individual accounts due to regulatory pressure, since it is SEC compliance.
Circle cracking down? pic.twitter.com/KwvX9sz0xp
— Evanss6 (@Evan_ss6) October 31, 2023
Without a formal explanation as to why the Circle individual accounts will be closed by the end of this month, the space for speculation was wide. For instance, popular crypto enthusiasts and analyst Adam Cochran suggested that the stablecoin issuer is acting to prevent the draining of its reserves from individuals suspected to be conducting money laundering activities.
“Honestly my personal bet is that the TUSD/USDT rotation into USDC that has been draining their reserves has come from a network of consumer accounts – which is why it can’t be pinned down. KYC mules isn’t exactly a new concept – so wouldn’t surprise me if that’s the strategic tradeoff here,” Cochran noted.
Closer Look at Circle and the Stablecoin Industry
The stablecoin industry has significantly been infiltrated by institutional investors seeking to venture into global markets through blockchain technology. Circle, which has partnered with BlackRock Inc (NYSE: BLK) and the Bank of New York Mellon Corporation (NYSE: BK), has grown to a globally recognized stablecoin issuer with different products. However, the company has stipulated that its products are meant for DeFi applications and institutions seeking to transfer money around the world seamlessly.
As of reporting time, Circle offered several products including USDC, EURC, cross-chain transfer protocol, programmable wallets, and a smart contract platform. The leading product was USDC with a market capitalization of about $25 billion and around 1.8 million holders that facilitated a 24-hour trading volume of approximately $4 billion. In the past year, Circle issued $124.9 billion and its customers redeemed $143.7 billion.
As for the EURC, it is currently available on Ethereum, Avalanche, and the Stellar networks. Notably, the EURC had a total market capitalization of about €50.9 million. Meanwhile, Circle continues to face intense competition from Tether (USDT) as more countries prepare to launch and roll out their respective CBDCs.
Circle Announces Closure of Individual Consumer Accounts on November 30
