Circle co-founder and CEO Jeremy Allaire compared the current FTX insolvency issue that has shook the cryptocurrency market to the “Lehman Brothers” crisis for cryptocurrency. In fact, Lehman Brothers played a role in triggering the worldwide financial crisis that began in 2008.
“Finally, as someone who’s been involved in this industry for 10 years, it is disappointing that a technology that was spawned in reaction to the Lehman Bros. moment of 2008 has given rise to its own version of the same,” he tweets.
According to Allaire, the crisis has no effect on Circle’s USDC. Notably, the company has just relocated USDC reserves to the BlackRock fund, an American multinational investment company. Allaire highlighted that Circle has been regulated in numerous jurisdictions throughout the world since 2014, and that USDC is backed 100% by government treasury bonds and cash. Circle has recently gotten approved by the Monetary Authority of Singapore (MAS) with one other firm, Paxos.
He tweeted that Circle’s mission is to “harness crypto and blockchains to increase the utility value of money, and build a financial system that is more open, inclusive, transparent and accessible to all.”
Allaire has commented on the situation caused by the news of Binance acquiring FTX.com, whose native coin FTT plunged 80% since Binance CEO declared that his exchange would sell its FTT token, on Sunday.
Circle CEO stresses on the urgent need of regulations
Circle CEO concurred with Coinbase CEO Brian Armstrong that the absence of regulatory constraints in the United States has facilitated the emergence of a risky, speculative atmosphere that has prompted many businesses to operate abroad. As a result, “offshore regulatory arbitrage” sprang up, giving rise to “global hydra companies” with no fixed abode and thus able to dodge consequences for their illegal activities.
Allaire wants to see firms like these held responsible for market manipulation as well as other anti-competitive actions in the cryptocurrency industry. In November 2021, Alaire claimed that he supported the Biden administration‘s plans to regulate the company and others like it, such as banks.