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An Update on USDC and Silicon Valley Bank

circle.com

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Re: An Update on USDC and Silicon Valley Bank

#111

Post by everfree »

danaos wrote: post #49

I have always kept away from circle after they were caught manipulating reviews. https://www.reddit.com/r/Bitcoin/comments/5ms1zc/after_being...

There are lots of financial incentives for people to review bomb the app in both directions. Is there any evidence that it wasn't third parties manipulating the reviews both times in both directions?

I'm imagining a second thread on a different forum, nearly identical to the thread you linked and just as ideological, with a title like "After Circle was unfairly review-bombed with 1 Star reviews by haters, our community has added 55+ Five Star reviews in 3 days."

Re: An Update on USDC and Silicon Valley Bank

#113

Post by everfree »

yunohn wrote: post #94

> redemption is constrained by the working hours of the U.S. banking system Why do they keep saying this? This should’ve always been the case, regardless of SVB’s collapse. Seems more like a non sequitur to cover for an actual issue.

Typically, Coinbase has been able to absorb liquidity on weekends to give consumers the illusion that USDC is redeemable outside of banking hours, but the SVB crash caused their weekend reserves to run out.

If SVB didn't crash, there wouldn't have been a huge spike in USDC redemptions, and Coinbase would have been able to service redemptions using their weekend reserves like they always have.

Re: An Update on USDC and Silicon Valley Bank

#114

Post by everfree »

latchkey wrote: post #109
everfree wrote: post #108

Earlier quoted context omitted.

If they catch you doing what?

Trying to arb usdc.

Do you have a source for that? It seems like it would generally be in Coinbase and Circle's best interest for people to arb USDC (at times when redemptions are live).

Re: An Update on USDC and Silicon Valley Bank

#115

Post by humanizersequel »

babyshake wrote: post #95
WalterSear wrote: post #45

Earlier quoted context omitted.

Short? I can't see this not returning to it's peg by the next news cycle. It's free money. SVB went bankrupt - as a business: it can't pay its bills. People are reacting to this as if the deposits have vanished entirely. If you think USDC is a shorting opportunity, short anything crypto. USDC is literally the second largest domino.

You think USDC failing would be bigger than ETH failing? If ETH broke in a way it couldn't recover from I would think that is the second biggest domino (close to tied for first, even).

ETH is probably a bigger domino than Bitcoin right now.

Re: An Update on USDC and Silicon Valley Bank

#117

Post by humanizersequel »

benatkin wrote: post #62
oldgradstudent wrote: post #58

Earlier quoted context omitted.

> Mostly just making sure SVB's assets are used to lessen the impact of the closure That's standard practice. Money from liquidation goes first to insured deposits, then what remains goes to uninsured deposits, then to pay other debts, and finally if anything is left, to shareholders. Looks like here it will only cover insured deposits and substantial fraction of uninsured deposits.

Yeah, some think that substantial fraction will be 100%. We'll see! I don't want to give Circle one cent of bailout money, though. And their post is saying that they are owed a full bailout because they participated in the bank run on the day of the bank run, and also begging for a full bailout. Pretty pathetic.

>And their post is saying that they are owed a full bailout because they participated in the bank run on the day of the bank run, and also begging for a full bailout.

Where in this post does it say that?

Re: An Update on USDC and Silicon Valley Bank

#118

Post by panarky »

WalterSear wrote: post #45
bb88 wrote: post #24

Earlier quoted context omitted.

Can one short USDC with leverage?

Short? I can't see this not returning to it's peg by the next news cycle. It's free money. SVB went bankrupt - as a business: it can't pay its bills. People are reacting to this as if the deposits have vanished entirely. If you think USDC is a shorting opportunity, short anything crypto. USDC is literally the second largest domino.

If you're right, then you can pick up some easy profits by buying USDC at a discount. The amount you're willing to commit is a good indicator of how confident you are in your assessment.

Re: An Update on USDC and Silicon Valley Bank

#119

Post by wmf »

lxgr wrote: post #104
wmf wrote: post #100

Earlier quoted context omitted.

Some people are saying "gotcha! you can't redeem" as if that's a real problem and Circle is clarifying that you could never redeem on the weekend.

But something must be different this weekend compared to all the ones before, at least at Coinbase: https://news.ycombinator.com/item?id=35105039

There's a bank run on USDC right now which is probably exceeding Coinbase's cash on hand or risk tolerance.

Re: An Update on USDC and Silicon Valley Bank

#120

Post by benatkin »

humanizersequel wrote: post #117
benatkin wrote: post #62

Earlier quoted context omitted.

Yeah, some think that substantial fraction will be 100%. We'll see! I don't want to give Circle one cent of bailout money, though. And their post is saying that they are owed a full bailout because they participated in the bank run on the day of the bank run, and also begging for a full bailout. Pretty pathetic.

>And their post is saying that they are owed a full bailout because they participated in the bank run on the day of the bank run, and also begging for a full bailout. Where in this post does it say that?

The part where they participated in the bank run:

> $3.3bn of USDC’s cash reserves remain with SVB. As of Thursday, we had initiated transfers of these funds to other banking partners. Though these transfers had not yet been settled as of close of business Friday, we remain confident in the FDIC’s management of the SVB situation and stand ready to receive these funds.

The part where they said that because they participated in the bank run that they should keep it all, presumably even if others who didn't participate in the bank run lose some of theirs:

> We have reason to believe that under applicable FDIC policy, transfers initiated prior to a bank entering receivership would have otherwise been processed normally. In other words, the FDIC should allow transactions to settle in the ordinary course through the end of a bank’s standard daily processing cycle until the FDIC takes control of the failed institution.

"transfers initiated prior to a bank entering receivership" is doing a lot of work here.

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