Tether CTO denies exposure to FTX and Alameda after exchange's forced sale

Quick Take

  • Tether CTO Paolo Ardoino said the stablecoin issuer has no exposure to FTX or Alameda Research after the crypto exchange was forced to sell assets to rival Binance. 
  • Ardoino’s comments come as the crypto industry looks for further contagion from FTX’s woes.

Tether CTO Paolo Ardoino said the world's largest stablecoin issuer has no exposure to FTX or its sister firm Alameda Research after the crypto exchange was forced into a merger with rival Binance. 

"Tether does not have any exposure to FTX or Alameda," Ardoino tweeted, adding: "0. Null. Maybe is time to look elsewhere. Sorry guys. Try again."

Ardoino's denial was responding to a tweet from crypto reporter Colin Wu that both Circle, the creator of the USDC stablecoin, and Tether should disclose their financial relationships with FTX and trading firm Alameda. 

Jeremy Allaire, co-founder and CEO of Circle, had earlier described the FTX insolvency crisis as a "Lehman Brothers moment" for crypto. He also said USDC is not affected by the crisis.

FTX shocked the crypto industry on Tuesday by announcing it would sell its non-U.S. assets to Binance. FTX's FTT token had come under pressure after Changpeng Zhao, the larger exchange's CEO, said Binance begin selling off its holdings. Zhao cited "recent revelations" for the decision to sell — seemingly in reference to a CoinDesk report that had revealed details of Alameda's balance sheet.

Ardoino's rebuttal of Wu's accusations comes as the crypto industry looks for further contagion from FTX's woes. He further clarified that Alameda had previously issued and redeemed "a lot" of tether, "but no credit exposure has been matured." He explained that, "Tether is issued and redeemed upon market demand by our customers."

Tether Peg

Tether said in a blog post later in the day that its tokens were 100% backed by reserves, with assets exceeding liabilities. The company has over $70 billion of collateral it can redeem USD against, it added.

"Tether holds a strong, conservative, and liquid portfolio, which includes cash, cash equivalents and U.S. Treasuries," it said. "While the situation with FTX has caught many people by surprise given their reputation and size, FTX is not indicative of the practices of all substantial players in the industry."

The company said that Tether did not depeg from the U.S. dollar earlier in the day, and it attributed prices that appeared to have dropped below $1 to a data issue with CoinGecko's API connection.

"The price discrepancy of USDT existed there and there alone while on Binance, Bitfinex, and Coinbase it was trading within 10bps from parity," the company said. "The data issue has already been resolved by the CoinGecko team."

Disclaimer: The former CEO and majority shareholder of The Block has disclosed a series of loans from former FTX and Alameda founder Sam Bankman-Fried.

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