An update on our USDC services

March 13, 2023

During this period of heightened uncertainty for the USDC economy with the closure of some USDC banking partners, StraitsX remains committed to clear and transparent communication around our services that have been impacted.

What has happened?

  1. Circle has discontinued Silvergate as their banking partner for USD fiat rails. USDC has zero exposure to Silvergate, with limited reserves already transferred out prior to the bank’s closure.
  2. Silicon Valley Bank (SVB) has suffered a bank run, initially impacting a portion of USDC’s cash reserves (~USD3.3bn) over the past few days. USDC Cash deposits are being recovered and transferred to other banking partners.
  3. New York regulators have also closed New York-based Signature Bank, just days after SVB’s closure. Circle had maintained transaction and settlement accounts with the bank previously.  

As of 12 March 2023, Federal Deposit Insurance Corporation (“FDIC”) has committed that all insured depositors of SVB will have full access to the insured deposits no later than 13 March 2023, and consequently . the USD3.3bn USDC reserve deposit held at SVB, about 8% of the total USDC reserve, will be fully available when U.S. banks open on Monday.. Circle has also announced expanded banking partnerships with USDC redemptions supported through Cross River Bank and BNY Mellon. USDC cash reserves are also in the process of being transferred to BNY Mellon. USDC remains redeemable 1:1 with the US Dollar.

Temporary pause in USD bank transfers via the StraitsX dashboard

StraitsX has temporarily paused USD deposits and withdrawals as part of our risk management procedures and we continue to monitor the situation closely. 

  • USD bank transfers in via the StraitsX dashboard have been suspended as of 10 March 2023, 0000HR SGT; and
  • USD bank transfers out via the StraitsX dashboard have been suspended as of 11 March 2023, 1500HR SGT. 

All incoming and outgoing USDC blockchain transactions are not affected, and will be processed as usual.

Temporary pause in some Over-The-Counter (“OTC”) services

OTC trades involving USDC have also been temporarily paused until further notice. Block trades starting from 50,000USD are still available for the following digital assets:

  • XSGD
  • XIDR
  • USDP
  • BUSD*

*OTC services for BUSD are only restricted to the selling of BUSD. The buying of BUSD is currently suspended in the wake of New York State Department of Financial Services ordering BUSD issuer Paxos from minting new BUSD.

Resumption of services

We are heartened by efforts from the US Federal Reserve and financial regulators to provide our trusted partner, Circle, with support to recover 100% of USDC reserves. 

As we continue to monitor the situation, USDC services will remain paused to ensure the stability of our platform. A further update will be shared in the coming days on the resumption of selected services once we deem the USDC economy to be stable.

Is there an impact on XSGD reserves?

There is no impact on XSGD reserves, StraitsX has no direct exposure to Silicon Valley Bank, Silvergate Bank or Signature Bank. XSGD remains 100% placed in cash reserves custodised in a licensed banking institution in Singapore. We provide monthly third party ISCA audited attestation reports on our reserves. XSGD remains redeemable 1:1 with the Singapore Dollar. 

All XSGD services via the StraitsX platform remain available. Please be advised that you may find longer processing times due to an increase in transaction activity arising from the current industry situation.  

We apologise for the inconvenience recent events may have brought to our users, and we thank you for your continued support with StraitsX.

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