USDT Unaffected by FTX and Alameda Crisis, Tether Claims

Tether, the world’s largest stablecoin issuer, has issued a statement assuring investors that the collapse of crypto exchange FTX and related Alameda Research has had no impact on USDT.

The firm claims that Alameda is an issuer of USDT, which indicates that Alameda transferred USD to Tether and received USDT in exchange. Alameda’s only choice now is to refund USDT to Tether and get compensated in USD.

Tether states in a recent blog post that because Alameda was a big issuer of USDT, concern about whether the trading firm’s bankruptcy poses a danger to Tether has appeared.

“Those reserves are still in Tether’s possession; 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 redeem any USDT they have for USD via Tether’s redemption facility. This is the same as any other USDT holder around the world.

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

The main problem countless other companies are facing is that they recklessly lent Alameda various assets relying on extremely illiquid collateral. Since Alameda cannot repay those loans at this time, those companies have a hole on their balance sheet. This is not how USDT issuance works, and is not behavior Tether engaged in with Alameda in any way.”

The Hong Kong-based corporation also addressed numerous crypto exchanges’ decision to suspend USDT deposits on the Solana (SOL) network. Tether claims that this has no effect on it:

“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 heavy involvement in Solana doesn’t impact the underlying dynamics of how USDT functions and USDT issuance works whatsoever.

The move to suspend USDT deposits on these exchanges is likely just due to the heavy connections between FTX, Alameda, and Solana. If holders of USD? want to redeem USDT with Tether, they still can. 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.”

Last Friday, Tether said in a Tweet that a $1 billion worth of USDT chain swap from Solana to Ethereum was imminent.