They see something really bad on their books that's separate from their core business. Just like how Lehman Brothers was a profitable bank that got shredded by one risky trading strategy.
These stablecoins have been devoured one by one, and each time they fall more people start trying to get their money out. USDC will experience a run and it might not be survivable without liquidating user account holdings, which will be a massive extinction event for retail crypto.
USDC: fully collateralized by cash or cash equivalents held in US banks - basically a money market fund
Terra: partially collateralized by crypto assets + algorithmic magic
Tether: like USDC but not held in US banks, and the actual collateral may be partial or of lower quality
Dai: overcollaterelized by crypto assets + algorithmic magic
These are really distinct things and your risk model for each of them should be different.
"The order further finds that Tether and Bitfinex’s combined assets included funds held by third-parties, including at least 29 arrangements that were not documented through any agreement or contract, and that Tether transferred Tether reserve funds to Bitfinex, including when Bitfinex needed help responding to a “liquidity crisis.”"
When money market funds were all about to break the buck in 2008 the Treasury department stepped in with a $50 billion insurance program and the Fed started buying commercial paper to prop them up. Will they do the same for USDC?
I doubt USDC is undercollateralized. I don't doubt that there are situations where it could depeg, but I don't think anyone ought to be going to jail if it does.
Given that their business is just a “buy sell” platform, they are trimming around to get just that
They have lots of other features like “NFTs, lending” etc and other investments in their UX (separating out to currency vs smart contracts vs defi) I’m sure all that A/B testing to get that will be squeezed now too