A report from Peckshield has shown that Coinbase alone burned over $4.7 billion in the last 24 hours. There are speculations that the massive burn might relate to the Securities and Exchange Commission’s (SEC) crackdown on Kraken’s staking program.
Coinbase Records Massive USDC Withdrawal Requests
Circle was the recipient of most of the USDC tokens transferred from Coinbase. This me the tokens were sent to be burned and converted to fiat by the transaction initiators. Burning USDC means Coinbase customers are converting their stablecoins to fiat.
On Thursday, Kraken agreed to unstack the assets of U.S. clients in a settlement deal with the SEC. The news caused a spiral in the crypto market, leaving Coinbase with heavy on-chain transactions to fill.
Coinbase Bounced Back from USDC Burn
Despite massive withdrawal requests, Coinbase managed to record a net gain in USDC inflows during the last 24 hours. According to another report from OxScope, Coinbase broke even and slightly exceeded the amount of USDC burnt on Thursday.
Coinbase received $4.8 billion USDC in the past 24 hours, making a net gain of $330 million. The inflow, however, was from a singular address after the sender had moved USDC from Circle.
Crypto Market in Panic Mode
Coinbase was not the only victim of the panic created by Kraken’s staking meltdown. The broader market also suffered a massive setback as supplies of crypto assets increased, and investors became scared.
Bitcoin went down over 5% following the news, and altcoins fell even more. ETH and SOL were down 6% and 11%, respectively, leading to a near-market capitulation.
The strict regulations of the U.S. regulatory body SEC continue to hunt crypto firms and projects. Even though it faced criticism, the regulator has tightened its rules in the U.S. following the FTX capitulation.
