Gregory Klumov, CEO of STASIS – an issuer of a Euro stablecoin, has issued a statement criticizing Circle’s decision to freeze USDC that is parked in Tornado.Cash addresses. Circle, the issuer of the second largest stablecoin in the market, took the action following the US Department of Treasury, Office of Foreign Asset Control (OFAC), decision to sanction the crypto mixer. The sanctioning of what is effectively open-sourced code has ignited a huge debate within the crypto-sphere as to whether OFAC’s actions are legal and what type of impact this has on the future of individual rights.
Klumov, noted that around $75K is held in 44 different wallets, adding that the freeze goes against decentralization and the idea of Web3:
“We at STASIS feel that there’s still a huge gap in the learning curve when it comes to cryptocurrencies. When a euro stablecoin is issued by a U.S.- based entity using the U.S. legal and financial infrastructure, the risks of U.S. legislation are multiplied by European ones. When risks multiply, the resulting risk becomes the risk squared,” said Klumov. “Most users will be unaware of the level of risk involved with this emerging digital asset class. There are more than a dozen euro stablecoins on the market nowadays.”
Circle announced a euro-backed stablecoin (EUROC) this past June.
As for Circle, its decision should be expected as the federal government could pursue action against any entity doing business with Tornado.Cash regardless of the controversial stance. Circle is in the process of pursuing a federal bank charter, thus potentially gaining a level of regulation that would legitimize its operations. Flouting US sanctions would most certainly be detrimental to Cirlce’s future.