By Tom Wilson
LONDON (Reuters) – Major U.S. cryptocurrency company Circle will end support for its USDC token on the Tron blockchain network, a decision the company said on Wednesday “is in line with its efforts to ensure USDC remains trusted, transparent and secure.”
Boston-based Circle said in a blog post that it will 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 provide a reason for its decision, but said that as part of its risk management framework, it is “continuously evaluating the suitability” of the blockchain backing USDC, the second-largest stablecoin after Tether.
It said institutional customers can transfer USDC held on Tron to other blockchains, or redeem their tokens for fiat currency, until February 2025. Retail customers can transfer USDC to other blockchains and redeem USDC on cryptocurrency exchanges and brokerages.
Circle, which said in January it had filed for a U.S. IPO, last year terminated accounts held by Tron founder Justin Sun and his affiliates.
Sun, a prominent cryptocurrency entrepreneur, was sued last year by the Securities and Exchange Commission for allegedly artificially inflating trading volumes and selling TRON tokens as unregistered securities. Sun said the SEC's charges “lack merit.”
A company spokesperson said Circle's latest announcement affects USDC on the Tron blockchain, “rather than an individual user or related business entities.”
With about $28 billion in circulation, USDC is the eighth-largest cryptocurrency token, according to data firm CoinGecko. Circle's website says $335 million worth of USDC is hosted on Tron.
In November, Reuters, citing interviews with financial crimes experts and blockchain investigative specialists, reported that Tron had overtaken Bitcoin as a platform for transferring cryptocurrencies linked to groups designated as terrorist organizations by Israel, the United States and other countries.
In response to this article, a Tron spokesperson said it has no control over those who use its technology, and that it is not associated with the groups identified by Israel.
(Reporting by Tom Wilson in London; Editing by Tommy Reggiore Wilkes and Emilia Sithole Matarese)
