Recall that last week the American bank Silicon Valley collapsed, on whose accounts $3.3 billion of USDC stablecoin security was kept. As a result, USDC and DAI, since USDC is used to back this stablecoin, decoupled from the dollar. And, as Changpeng Zhao stated, now the risks of the traditional financial system threaten the cryptocurrency industry.
“Banks have become risks for fiat-backed stablecoins. In fact, Do Kwon was right, just wrong with the specific implementation of his ecosystem. With all the changes in mind, we have decided to move the remaining funds from the $1 billion Industry Recovery Fund from the BUSD stablecoin to cryptocurrencies including BTC, BNB and ETH,” Binance CEO wrote.
Zhao also said that fiat currencies themselves can pose risks to cryptocurrencies, stablecoins, and financial stability in general.
Recall that Do Kwon created the Terra ecosystem, one of the main parts of which was the UST algorithmic stablecoin, backed by the LUNA token. However, during market turbulence, the system failed and the stablecoin collapsed, dragging the entire Terra ecosystem with it for tens of billions of dollars. Now law enforcement agencies of various countries are investigating the activities of Terraform Labs and are looking for the founder of the Terra ecosystem. It is assumed that Do Kwon is hiding in Serbia.
Source: Bits
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