© Reuters. FILE PHOTO: Representations of cryptocurrencies in this illustration taken January 24, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
By Tom Wilson
LONDON (Reuters) -Major U.S. cryptocurrency company Circle will stop supporting its USDC token on the Tron blockchain network, a decision the company said on Wednesday “aligned with its efforts to ensure USDC remains trustworthy, transparent and secure.” .
Boston-based Circle said in a blog that, effective immediately, it would no longer mint USDC tokens on Tron, a fast-growing platform widely used to transfer stablecoins whose founder faces regulatory issues in the United States.
Stablecoins are digital tokens designed to maintain a constant value and are backed by traditional currencies.
Circle did not give a reason for its decision, but said that under its risk management framework it “continuously evaluates the suitability” of the blockchains supporting USDC, the second-largest stablecoin after .
It said institutional clients can transfer USDC held on Tron to other blockchains, or redeem the tokens with it for traditional currency, until February 2025. Retail clients can transfer USDC to other blockchains and redeem USDC in cryptocurrency exchange and brokerage houses, he added.
Tron's vision is to become the world's “largest and most prosperous decentralized financial protocol,” a Tron spokesperson said, adding: “We continue to move forward.”
Circle, which in January said it had filed for an initial public offering in the United States, last year terminated accounts held by Tron founder Justin Sun and his affiliated companies.
Sun, a prominent crypto entrepreneur, was sued last year by the Securities and Exchange Commission for allegedly artificially inflating trading volumes and selling Tron tokens as an unregistered security. Sun said the SEC's charges are “baseless.”
Circle's latest announcement affects USDC on the Tron blockchain, “as opposed to an individual user or related business entities,” a spokesperson said.
With about $28 billion in circulation, USDC is the eighth-largest crypto token, according to data firm CoinGecko. USDC worth $335 million is hosted on Tron, Circle's website says.
In November, Reuters reported, citing interviews with financial crimes experts and blockchain investigation specialists, that Tron had surpassed itself as a platform for crypto transfers associated with groups designated as terrorist organizations by Israel, the United States and other countries.
In response to that article, a Tron spokesperson said it had no control over who used its technology and was not linked to the groups identified by Israel.
