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Tether, the world’s largest stablecoin issuer, has released a statement assuring investors that USDT will not be affected by the meltdown of crypto exchange FTX and its trading arm, Alameda Research.
In a new blog post, Tether To tell Since Alameda was a large issuer of USDT, speculation has surfaced as to whether the collapse of the trading firm poses a risk to Tether.
Tether states that Alameda being the issuer of USDT means that Alameda originally sent USD to Tether and received USDT in return. Currently, the only option Alameda has is to return USDT to Tether and refund in US Dollars.
These reserves are still owned 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 USDT? Their only option is to redeem their USDT for USD via Tether’s redemption feature. This is the same as other USDT holders around the world
Tether has no outstanding loans of USDT, Tether reserves, or other funds.
A major problem faced by countless other companies is their reckless lending of various assets to Alameda, relying on highly illiquid collateral. Alameda is unable to repay these loans at this time, leaving a hole in the balance sheets of these companies. This is not how his USDT issuance works, nor is it Tether’s involvement with Alameda.
The Hong Kong-based company has also responded to decisions from multiple cryptocurrency exchanges to stop depositing USDT into the Solana (SOL) blockchain. Tether says this has no effect either.
USDT issued on Solana is the same as USDT issued on any other chain. , has no impact on the underlying dynamics of how USDT works and how USDT issuance works.
The move to suspend USDT deposits on these exchanges is likely due to strong ties between FTX, Alameda, and Solana. If you’re a USD holder? If you want to exchange USDT for Tether, you can still do so. Solana’s USDT is equivalent to his USDT on other blockchains, is not issued by Solana, and is not reserved by Alameda or FTX.
On Friday, Tether announced a chain swap of USDT worth $1 billion from Solana to Ethereum.
Within minutes, Tether works with a third party to perform a chain swap to convert Solana to Ethereum ERC20 for 1 billion USDt.of #tether The total supply remains unchanged during this process.
Learn more about chain swap here ??https://t.co/abfgnELSviTether (@Tether_to) November 18, 2022
A chain swap is the process of moving crypto assets from one blockchain to another. According to Tether, chain swaps are requested By an exchange when there is a surplus of funds on one blockchain and a deficit on another.
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