According to the cryptocurrency statistics dashboard Glassnode, the amount of stablecoin USD Coin (USDC) supply held by the top 1% of addresses fell to a 22-month low on the same day that the USDC average trade volume in the previous seven days reached an all-time high.
The overall supply of USDC has decreased by $100 million over the past week, and Sunday’s USDC deposits touched a 16-month low, according to Glassnode’s data.
In response to the U.S. Treasury Department’s sanctions against the Ethereum-based cryptocurrency mixer, USDC frozen more than 75,000 USDC in 44 Tornado Cash-related addresses at the beginning of August.
A group named Centre, which was established by cryptocurrency lender Circle and includes participants from the cryptocurrency exchange Coinbase and the largest Bitcoin miner Bitmain, manages USDC.
Since it made the announcement that it will be freezing the Tornado Cash-related addresses, USDC’s market valuation has decreased by US$2 billion, according to CoinMarketCap.
Following the announcement of the freeze, more than $1.6 billion was transferred from USDC to rival stablecoin Tether (USDT), according to crypto analyst @TheLondonCrypto, who made the observation last week.
To date, USDT has not made any public statements regarding the sanctions or its plans to freeze addresses connected to Tornado Cash.
Because it safeguards transaction privacy while being criticized for serving as a tool for crime money laundering, Tornado Cash has generated controversy.