Circle appears to think Tron isn’t up to par. The major stablecoin issuing company announced on Wednesday that it would cease minting coins on the layer-1 chain immediately. This was the first step in a “phased-transition” to remove the network created by Justin Sun who faces legal challenges.

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Circle wrote in that it constantly assesses all blockchains which support USDC as part of its risk management framework. The company said the decision was made after an “enterprise wide” effort to “ensure USDC remains trustworthy, transparent and secure.”

Some may be surprised by the move, given that Tron is known for its low fees and rapid settlement times.

USDT Price Index and Live Chart – CoinDesk”>(USDT) on Tron than on Ethereum, driven by the popularity of using Tron-based USDT to move funds between exchanges and growing use for consumer purchases in developing markets.

Circle has not said much about the “enterprise wide” review that apparently involves both corporate and compliance divisions of the company. Circle has not said much about its “enterprise-wide” review, which apparently involves the company’s compliance and corporate divisions.

The recent pull-up of the drawbridge that separates Circle and Tron could be the latest indication of a growing divide in the crypto market between those firms who are compliant with regulations (or at the very least, those who signal their compliance friendliness), and those using crypto on the black or gray markets. Binance was sued by the Department of Justice and delisted USDC a few years ago without explanation.

The line between the white, gray, and black markets is not always clear and it’s constantly shifting. There are many signs of this, such as Coinbase’s and Kraken’s sudden decisions to remove privacy coins from their exchanges, or the increasing number of Know-Your-Customer (KYC), which is meant to better monitor crypto flows.

It shouldn’t be controversial to say Justin Sun is controversial. The SEC charged Justin Sun with securities fraud in March 2023 for allegedly fraudulently inflating TRON’s trading volume and misleading investors by using undisclosed celebrity endorsers. Sun denied the charges. It is not even mentioning the rumors that are circulating regarding the ex-Grenadian diplomat.

Circle’s decision could be more telling about USDC rather than Tron. USDC’s growth was on the rise until last year. It looked like it would surpass USDT, its main competitor. Circle is losing ground due to a combination of factors including rising rates, which have benefited USDT over USDC.

Circle prides itself in being the transparent, regulated and compliant answer to Tether. Tether has been shrouded with mystery since its conception. Circle filed its initial paperwork in January for its second attempt to make an initial public offering, which means it’s likely in active discussions with the U.S. Securities and Exchange Commission during the review process.

Circle has taken several steps to divorce Tron, which is one of 11 blockchain networks that USDC supports. In response to accusations that USDC had been used for terrorist financing in a letter sent last fall, Chief Strategist Dante Disparte stated Circle terminated the accounts of Justin Sun and his businesses months earlier in February 2023.

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Circle’s decision to cut off Sun is not known. However, Disparte’s response was in response to an Oct. 9 letter by the nonprofit ethics group Campaign for Accountability. The letter claimed that Circle was closely linked to the Tron Foundation, and to SunSwap’s cross-chain protocol, which was accused to facilitate money laundering. Reuters reported in the same month that Tron was now preferred by terrorist organizations over Bitcoin.

Circle, are you acting with excessive caution? Does it want to protect its image by separating itself from the less savory aspects of crypto? Sun is a global phenomenon, but how well do people understand it? Does this represent a realignment of crypto where “regulatory-forward organizations” will join forces — regardless of whether they are justified?

Take a leaf out of the book of Sam Bankman Fried, a convicted felon who pretended to be interested in compliance and defrauded the world. Maybe the expected value is more valuable than the costs. Only $335 million of the $28 billion USDC currently in circulation is on Tron, while nearly half of all circulating Tethers ($50billion) trade on the network.

How conscious are you of that coupling?