Because of the risks of the TRON network, Chinese OTC institutions are said to be increasingly hesitant to accept the stablecoin USDT TRC20 version.
According to Wu Blockchain, many OTC trading units in the Chinese-speaking crypto community have announced to stop accepting the stablecoin Tether (USDT) TRC20 version – ie issued on Justin Sun’s TRON blockchain.
Matrixport, founded by Jihan Wu, has suspended the deposit and withdrawal of TRC20 USDT since the 9th, and there is no announcement until now.
— Wu Blockchain (@WuBlockchain) January 12, 2023
These trading units require users only to use Ethereum’s ERC20 USDT to trade.
Wu Blockchain also said that Matrixport, a crypto lending platform founded by former Bitmain CEO Jihan Wu, has suspended USDT TRC20 deposits and withdrawals since January 9 without giving a reason.
Although there is no specific reason for this move, Wu Blockchain speculates that the cause may be due to the bad news surrounding Justin Sun, TRON, and Huobi exchange in the past time. In addition, Chinese OTC circles are spreading rumors that USDT TRC-20 does not meet the US money laundering assessment criteria, thus being rejected for trading.
According to Tether’s website, TRON is currently the network with the largest circulating supply of stablecoins of this unit, with 37.1 billion USDT TRC20, larger than Ethereum with only 32.3 billion USDT ERC20. Tether also issues USDT on 12 other blockchains, but the amount is not comparable to TRON and Ethereum.
Total supply of Tether (USDT) on different blockchains. Screenshot of Tether website on the evening of January 12, 2023
TRON founder Justin Sun also spoke about the incident, asserting that USDT TRC-20 still works normally, is safe, and even benefits from TRON’s “decentralization,” allowing transactions to be carried out done at a low cost.
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