Mysterious fund withdraws millions from Circle as crypto market faces instability
The world of cryptocurrency was hit with yet another blow as Silvergate Bank, a popular crypto bank, suffered a crash that caused the market to plummet, and the price of ETH to drop by 5%. Lookonchain, a popular Twitter account, reported the news, stating that the market was in chaos due to the crash.
1/ With the crash of #Silvergate, the crypto market plummeted, and the price of $ETH dropped by 5%.
Before $ETH plummeted, the price had a slight increase.
The mysterious fund withdrew 312M $USDC from #Circle and transferred to exchanges during the 8 hours of the uptick. pic.twitter.com/KiH3xdgguU
— Lookonchain (@lookonchain) March 3, 2023
However, before the crash, the price of ETH had a slight increase, which prompted a mysterious fund to withdraw 312M USDC from Circle and transfer to exchanges during the 8 hours of the uptick. This strange behavior of the fund was noticed by analysts who stated that the data on the chain showed a very peculiar pattern.
The fund continued to make strange withdrawals and transfers, stopping for a period of time before resuming. During this period, the price of ETH had increased by 2%. However, the market was not stable, as $210M in assets were liquidated in the past 4 hours due to the market’s instability.
Coinbase, one of the leading cryptocurrency exchanges, also tweeted that it would no longer accept or initiate payments with Silvergate, citing recent developments and out of an abundance of caution. The exchange reassured its clients that all client funds continue to be safe, accessible, and available.
At Coinbase all client funds continue to be safe, accessible & available.
In light of recent developments & out of an abundance of caution, Coinbase is no longer accepting or initiating payments to or from Silvergate.
— Coinbase (@coinbase) March 2, 2023
The news of Silvergate’s crash comes after it was recently downgraded by JP Morgan from “neutral” to “underweight” due to concerns about insolvency. Silvergate’s troubles started when FTX, a popular crypto exchange, went bankrupt, and it is currently facing an investigation from the US Department of Justice over its involvement in last year’s FTX crash.
The cryptocurrency market has been volatile, and this recent development has caused further uncertainty. However, the market has been resilient in the past, and investors hope that it will recover from this setback.
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