Nomad, Slope Hacks Create New Annoyance for Their Shared Backer Circle Internet Financial
The venture-capital arm of the USDC stablecoin-issuer gave money to Nomad and Slope, which were both exploited this week.
![(Sandali Handagama/ CoinDesk)](https://www.coindesk.com/resizer/sopnSoOdToAkZS0Uym9UnwW-Dg4=/567x425/filters:quality(80):format(jpg)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/PFBKERQN3JHBJKTU5ZEFFPHU4E.png)
This week’s nearly $200 million exploit of Nomad, the cross-chain bridge, and the $6 million drained from Slope Financial wallets have something in common: Both projects are backed by Circle Internet Financial’s venture-capital division.
It’s an additional headache for Circle as it aims to go public later this year. The company, which got into VC investing in late 2021, is best known for issuing a stablecoin called USD Coin (USDC). The entire stablecoin space finds itself under greater regulatory scrutiny following this year’s collapse of Terra’s terraUSD (UST).
Circle, which invests in early-stage blockchain projects and companies, participated in the $8 million Series A for Slope Finance in February and the $22.4 million seed round for Nomad in April.
“We are monitoring the current situation,” a Circle spokesperson responded when CoinDesk asked for a comment regarding the Nomad exploit. The statement was repeated when Circle was asked about Slope Finance.
Circle’s ties to Nomad and Slope didn’t cause any financial damage to the company, according to the spokesperson. The investments, however, showed how the interconnections of a growing industry can cast a shadow.
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.
Read more: What Is a Stablecoin?
After UST – another stablecoin that used a riskier method of maintaining its peg to the dollar – imploded this year, there were rumblings in Washington that more stablecoin regulation could be on the way.
Unlike UST, which was supposed to keep its one-to-one relationship with the dollar via an algorithm tied to another coin, LUNA (issued by Terra), Circle’s USDC pool of assets looks much more plain vanilla.
In a bid to increase transparency, Circle last month released an unaudited reserve report showing that USDC is backed by $42.1 billion in short-term U.S government bonds and $13.6 billion in cash, funds that could be used to stabilize the coin’s peg and ease industry-wide liquidation fears.