• A USDC investor paid over $2 million to receive only $0.05 of USDT while trying to evade a crypto market crash.
• The incident highlights the importance of double-checking information and methods of transfer before cashing out cryptocurrencies to avoid a permanent loss of funds.
• The collapse of Silicon Valley Bank (SVB) on March 10 has caused ripples in the crypto industry, leaving many investors anxious about the exposure of major players like Circle, the issuer of the popular stablecoin USDC.
Costly Mistake: How an Investor Lost 2 Million in a Race Against Time
The Incident
A USDC investor paid over $2 million to receive only $0.05 of USDT while trying to evade a crypto market crash. This incident highlights the importance of double-checking information and methods of transfer before cashing out cryptocurrencies to avoid a permanent loss of funds.
Background Information
The collapse of Silicon Valley Bank (SVB) on March 10 has caused ripples in the crypto industry, leaving many investors anxious about the exposure of major players like Circle, the issuer of the popular stablecoin USDC. With $3.3 billion, or around 8%,of its reserves held at SVB, Circle is now facing heavy redemptions as investors move to cash out.
What Went Wrong
Following fear for USDC insolvency, users fled for safety into other stablecoins but some made costly mistakes – one user paid $2,080,468.85 for just $0.05 worth USDT! They had their assets stored in a liquidity pool and used KyberSwap aggregation router instead opting for cheaper option which cost them heavily in this case.
Conclusion
The incident serves as an important lesson regarding double-checking information and methods used when cashing out cryptocurrency investments to avoid a permanent loss of funds due to panic sales during market crashes or other financial calamities faced by issuers such as Circle’s SVB debacle which left many investors worried about their investments‘ security and stability with USDC reserves exposed at risk due it’s reliance on external custodial services such as SVB bank accounts..