Alameda Generates $39.5 Billion USDT Prior to Bankruptcy Declaration

Alameda Research Minted $39.5B in USDT, Says Coinbase Exec

The head of product and business operations at Coinbase, Conor Grogan, has estimated that Alameda Research (Alameda) minted $39.5 billion in USDT (Tether) before declaring bankruptcy. At its peak, Alameda’s Tether made up about half of its assets under management.

Alameda and Cumberland Enabled USDT Arbitrage

USDT is a stablecoin that relies on active arbitrage to maintain its value at $1. Traders can increase its value by selling other coins like Bitcoin in exchange for Tether. Both Alameda and Cumberland received billions in Tether to improve liquidity for traders and profit from the spreads between bid and ask prices.

FTX and Alameda File for Bankruptcy

FTX and Alameda filed for bankruptcy after it was revealed that Alameda’s balance sheet held a large proportion of FTT tokens. FTX lacked liquidity to meet the resulting withdrawal demand and attempted to raise funds from external investors. The exchange eventually filed for bankruptcy and appointed an insolvency expert to oversee customer remuneration.

Former Alameda CEO Caroline Ellison to Testify

The criminal trial of former FTX CEO Sam Bankman-Fried is currently underway, with Caroline Ellison, Alameda’s former CEO, expected to testify. She was a member of Bankman-Fried’s inner circle and is anticipated to provide more details on the relationship between FTX and Alameda. Bankman-Fried’s defense may portray Ellison as a disgruntled ex-lover who disregarded instructions, potentially mitigating FTX’s collapse.

Hot Take: Implications of Alameda’s USDT Minting and Caroline Ellison’s Testimony

The revelation of Alameda Research’s massive USDT minting and its impact on Tether’s stability raises questions about the integrity of the cryptocurrency market. Additionally, Caroline Ellison’s testimony could shed light on the alleged misuse of funds and the intricate dynamics between FTX and Alameda. As the trial unfolds, it will be crucial to determine the extent of accountability and the potential consequences for individuals involved in these operations.