08-05-2022 icon

Circle Experiences Headache After Investing in 2 Hacked Crypto Projects

By Lucy Adegbe
Euro

Times are somewhat delicate for Circle Internet Financial, the issuer of a stablecoin called USD Coin (USDC), as its venture capital division is said to be a major backer of two crypto projects that were hacked this week.

In the hacks, nearly $200 million was stolen from Nomad, a cross-chain bridge, and $6 million was drained from Slope Financial Wallets.

This isn’t favourable for Circle whose stablecoin is the second-largest with a market capitalization of about $54B as the firm  plans to go public later this year. 

It also comes at a time when stablecoins face excessive regulatory scrutiny following the crash of UST, the supposed stablecoin of the Terra ecosystem.

Having launched its venture-capital arm in 2021, Circle invests in early-stage blockchain projects. It contributed to the $8M series A funding for Slope Financials in February and the $22.4M seed round for Nomad in April. 

While Circle says it is monitoring the situation, the company said the issues with Slope Financials didn’t cause any financial damage to it.

Circle’s USDC, which is pegged to the U.S. dollar, is the second-largest stablecoin, with a $54 billion market capitalization, according to CoinMarketCap data. It trails only Tether’s $66 billion USDT.