Alameda Research Allegedly Minted $39.55 Billion of Tether’s USDT Stablecoin
Alameda Research is facing scrutiny after it was accused of minting a staggering $39.55 billion worth of Tether’s USDT stablecoin. This amount makes up almost half of Tether’s current circulating supply and raises concerns about the transparency and governance of Alameda and its affiliated trading platform, FTX.
The allegations were brought to light by Conor Grogan, Director of Coinbase, on Twitter. Grogan revealed that Alameda was responsible for creating nearly 47% of Tether’s circulating supply, a higher figure than previously estimated by Protoss. Grogan updated the numbers with additional wallet data.
Questions About Governance and Transparency
It is important to note that the amount of minted Tether exceeds Alameda’s assets under management (AUM) at the peak of the cryptocurrency market. This revelation raises suspicions about the possibility of using customer deposits to offset trading losses.
The relationship between Alameda and FTX is now being closely examined by critics. Grogan pointed out the challenges in assessing redemptions due to Tether’s off-chain coordination of burns. Unlike other stablecoins, Tether does not use deposit addresses, making it difficult to track funds. There were approximately 3.9 billion USDT in redemptions within two days in May during the Luna market turmoil.
The Sam Bankman-Fried Scandal and Future Implications
Adding to the controversy, FTX founder Sam Bankman-Fried is currently involved in a fraud trial. His ex-girlfriend, Caroline Ellison, is expected to testify and provide more details about the inner workings of FTX and Alameda. This further intensifies the seriousness of the allegations.
Tether has recently resumed its lending operations after a year-long suspension. This move aims to protect their long-standing customers from liquidity shortages. Additionally, Tether has taken an undisclosed stake in German-based crypto miner Northern Data Group, signaling its interest in the AI sector.
Market Implications
Interestingly, despite the ongoing controversy, the amount of Tether on exchanges has reached a multi-month high. This suggests that traders are still optimistic about the market but also highlights Tether’s central role and amplifies the potential impact of these allegations.
Hot Take: Unveiling Questions about Alameda Research’s Involvement in USDT Minting
The allegations against Alameda Research for minting a significant portion of Tether’s USDT stablecoin raise concerns about the transparency and governance of both Alameda and its affiliated trading platform, FTX. The amount of minted Tether surpasses Alameda’s assets under management during the peak of the cryptocurrency market, leading to suspicions of using customer deposits to offset trading losses. The relationship between Alameda and FTX is under scrutiny, particularly regarding the difficulties in assessing redemptions due to Tether’s off-chain coordination. The ongoing fraud trial involving FTX founder Sam Bankman-Fried further adds to the gravity of these allegations. Despite the controversy, Tether’s presence on exchanges remains high, indicating continued market optimism but also amplifying the potential impact of these allegations.
By
By
By
By
By
By