Rumors Emerge: Chinese OTC Firms May Stop Accepting USDT TRC20
Concerns over TRON's network risks are leading Chinese OTC institutions to potentially halt acceptance of the TRC20 version of the stablecoin USDT.
According to Wu Blockchain, several OTC trading entities within the Chinese-speaking crypto community have reportedly stopped accepting the TRC20 version of Tether (USDT), which is issued on TRON's blockchain.
These trading firms are now requiring users to transact using the ERC20 version of USDT on the Ethereum network.
Recently, some OTC merchants in the Chinese market said that they no longer accept TRC20 USDT, and need users to go to the exchange to exchange for ERC20 USDT before trading. It is suspected to be related to the Justin Sun and TRON FUD spread by the community. Exclusive
— Wu Blockchain (@WuBlockchain) January 12, 2023
Wu Blockchain also noted that Matrixport, a crypto lending platform founded by former Bitmain CEO Jihan Wu, has suspended USDT TRC20 deposits and withdrawals since January 9, without providing an explanation.
Although no specific reasons have been given for this move, Wu Blockchain speculates that it may be related to recent negative news surrounding Justin Sun, TRON, and Huobi. Additionally, there are rumors circulating among Chinese OTC traders that USDT TRC20 does not meet U.S. anti-money laundering standards, leading to its rejection for transactions.
Regarding the reason why OTC merchants refused to accept TRC20 USDT, there is an explanation that it did not meet the anti-money laundering requirements of tools such as Chainalysis, so it was rejected by institutions and relatively compliant OTC merchants.
— Wu Blockchain (@WuBlockchain) January 12, 2023
According to Tether’s website, TRON is currently the largest network in terms of circulating supply of USDT, with 37.1 billion USDT TRC20 in circulation, surpassing Ethereum’s 32.3 billion USDT ERC20. Tether also issues USDT on 12 other blockchains, but none match the volume of TRON and Ethereum.
Total Supply of Tether (USDT) Across Various Blockchains. Source: Tether’s Website as of January 12, 2023
TRON founder Justin Sun has addressed the situation, asserting that USDT TRC20 continues to operate normally and securely. He highlighted that TRON's "decentralization" benefits users by facilitating transactions at lower costs.
As the crypto space continues to evolve, the importance of secure and reliable infrastructure becomes increasingly vital. That's why we at @trondao and @Tether_to are committed to building and maintaining #USDT-TRC20 as the most secure and convenient platforms in the industry.
— H.E. Justin Sun 孙宇晨 (@justinsuntron) January 12, 2023
