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This week, the cross-chain bridge and Nomad were used to steal nearly $200 million. Slope Financial wallets were also emptied of $6 million. Both projects are backed by the venture-capital arm of Circle Internet Financial.
It gives Circle one more thing to worry about as it plans to go public later this year. Late in 2021, the company started putting money into venture capital. It is best known for making a stable coin called USD Coin (USDC). After Terra's terraUSD failed this year, regulators are paying more attention to the whole stable-coin market (UST).
Circle invests in blockchain projects and companies in their early stages. In February, Circle helped Slope Finance raise $8 million for its Series A round, and in April, Circle helped Nomad raise $22.4 million for its seed round.
When CoinDesk asked Circle for a comment about the Nomad exploit, a spokesperson said, "We are watching the situation." When Circle was asked about Slope Finance, the same thing was said again.
A company spokesperson said that Circle's ties to Nomad and Slope didn't cost the company any money. But the investments showed how a growing industry's connections can cast a shadow.
CoinMarketCap says that Circle's USDC, which is tied to the U.S. dollar, is the second largest stablecoin with a market capitalization of $54 billion. It is second to Tether, which has $66 billion USDT.
After UST, another stablecoin that used a riskier way to stay tied to the dollar, crashed this year, there were rumblings in Washington that more rules could be coming for stablecoins.
Unlike UST, which was supposed to keep its one-to-one relationship with the dollar through an algorithm tied to another coin, LUNA (issued by Terra), Circle's USDC pool of assets looks much more vanilla.
In an effort to be more open, Circle released a non-audited reserve report last month. The report showed that USDC is backed by $42.1 billion in short-term U.S. government bonds and $13.6 billion in cash. These funds could be used to stabilize the coin's peg and ease fears that the whole industry will go bankrupt.
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