FinTech news in U.S. Treasury category

Both Tornado Cash and Blender.io appeared to play a role in obfuscating the digital trail of funds stolen in that $625 million hack, though Tornado was not sanctioned at that time and the Axie-linked theft was not mentioned in today’s OFAC announcement. Back in May, the U.S. Treasury also sanctioned cryptocurrency mixer Blender.io, another service the Lazarus Group used to launder cryptocurrency stolen after hacking the Ronin bridge on the play-to-earn video game Axie Infinity in April. The Treasury also said Tornado was used by hackers to launder at least $7.8 million in stolen crypto funds during last week’s Nomad heist, which saw cybercriminals exploit a trivial bug to steal $100 million in crypto assets, including Ethereum (ETH), Binance Coin, Tether, USD Coin and Dai. The U.S. has sanctioned decentralized cryptocurrency mixing service Tornado Cash for its role in enabling billions of dollars’ worth of cryptocurrency to be laundered through its platform.

While some may be hesitant about stablecoins after the UST situation, the dramatic growth in USDC speaks to the fact that the crypto market does understand what a trusted stablecoin could provide, Allaire said. For example, the two largest stablecoins by market capitalization, Tether (USDT) and USD Coin (USDC), are backed by fiat-equivalent reserves issued by centralized firms.

UST is an algorithmic stablecoin that leans on a system of traders who swap between LUNA and UST when the value of UST goes above or below its 1:1 ratio, so it could hold to the U.S. dollar. The impact of this event can have broader implications across the market, as seen earlier this week when bitcoin’s value fell below $30,000 and U.S. Treasury Secretary Janet Yellen pushed for more stablecoin regulation during an annual testimony in front of the Senate Banking Committee on May 10, right in the middle of when Terra’s algorithmic stablecoin, UST, struggled to retain its peg.

Earlier today, U.S. Treasury Secretary Janet Yellen pushed for regulation during an annual testimony in front of the Senate Banking Committee, at a time where Terra algorithmic stablecoin UST struggles to retain its peg. Stablecoins by definition are supposed to be stable and hold their value through a 1:1 ratio that is fixed to an external peg like the U.S. dollar or it can be tied to other assets like UST, which is backed by dollars, but also cryptocurrencies like bitcoin and Avalanche.