Tether, publisher of Stablecoin, explains how the collapse of FTX and Alameda has no effect on USDT

Tether, publisher of Stablecoin, explains how the collapse of FTX and Alameda has no effect on USDT

Tether, the largest stablecoin issuer in the world, has released a statement assuring investors that USDT is in no way affected by the collapse of crypto exchange FTX and its Alameda Research trading arm.

In a new blog post, Tether says that since Alameda was a major issuer of USDT, speculation has surfaced about whether the collapse of the trading company poses a risk to Tether.

Tether says Alameda is an issuer of USDT means Alameda originally sent USD to Tether and received USDT in return. Now the only option Alameda has is to return USDT to Tether to be refunded in USD.

“Those reserves are still held by Tether; they are not on Alameda’s balance sheet. The collateral backing Alameda’s USDT is not on Alameda’s balance sheet.

What can Alameda do with their USDT? Their only option is to exchange any USDT they have for USD through Tether’s exchange facility. This is the same as any other USDT holder around the world…

Tether has no outstanding loans from USDT, from Tether’s reserves, or from any other funds.

The biggest problem facing countless other companies is that they have recklessly loaned Alameda various assets based on extremely illiquid collateral. Since Alameda is currently unable to repay those loans, those companies have a hole in their balance sheets. This is not how USDT issuance works, and it is not a behavior that Tether has engaged in with Alameda in any way.

The Hong Kong-based company is also addressing the decision by multiple crypto exchanges to halt USDT deposits on the Solana (SOL) blockchain. Tether says this won’t affect it either.

“USDT issued on Solana is the same as USDT issued on any other chain. The token simply represents a claim to $1 of Tether’s reserves and collateral. Alameda’s deep involvement with Solana does not affect the underlying dynamics of how USDT functions and how USDT issuance works.

The move to suspend USDT deposits on these exchanges is probably only due to the heavy connections between FTX, Alameda and Solana. As holders of USD? You can still exchange USDT with Tether. USDT on Solana is equivalent to USDT on any other Blockchain, it is not issued by Solana and is not reserved by Alameda or FTX.”

On Friday, Tether announced a chain swap of $1 billion USDT from Solana to Ethereum.

A chain swap is a process of moving crypto assets from one blockchain to another. According to Tether, chain swaps can be requested by an exchange if they have a surplus of funds on one blockchain but a deficit on another.

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