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Director of Coinbase Reveals Shady Operations at FTX and Alameda Research
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Conor Grogan, the Director of Coinbase, has shed light on some questionable operations at FTX and its sister company Alameda Research. On-chain data shows that Alameda was responsible for minting $39.55 billion worth of Tether’s USDT stablecoin, which accounts for about 47% of its circulating supply. This figure is higher than the estimate provided by a previous report from Protoss.
There is evidence of suspicious transactions between Alameda and FTX, where they use customer deposits to offset losses and engage in trading. This raises concerns due to Alameda’s questionable reputation, and the fact that Tether has never undergone an independent audit. Assessing redemptions is challenging because Tether coordinates burns off-chain and does not use deposit addresses.
In a separate development, it has been revealed that Tether has quietly resumed lending its stablecoin to long-standing customers after temporarily suspending the practice. This move aims to protect customers from liquidity shortages or the need to sell assets at unfavorable rates.
Additionally, Tether has made moves into the AI space by taking an undisclosed stake in German-based crypto miner Northern Data Group. The total number of Tether USDT stablecoins on exchanges has also reached a multi-month high, indicating increased buying power among crypto traders.
Trial Developments and Future Implications
These revelations come as FTX founder Sam Bankman-Fried faces a fraud trial, with his ex-girlfriend Caroline Ellison set to testify this week. Her testimony may provide further insights into the inner workings of FTX and Alameda.
It is important to note that Tether’s lack of transparency and independent audits raises concerns about the stability and legitimacy of its stablecoin. Investors should conduct thorough market research before investing in cryptocurrencies.
Hot Take: Tether’s Controversies Raise Concerns for Crypto Investors
The recent revelations about the operations of FTX, Alameda Research, and Tether have raised significant concerns within the crypto community. The involvement of Alameda in minting a large portion of Tether’s USDT stablecoin, along with questionable transactions and lack of transparency, highlights potential risks for investors.
Furthermore, the ongoing trial involving Sam Bankman-Fried and Caroline Ellison could uncover even more information about the inner workings of these companies. It is crucial for investors to stay informed and conduct thorough research before making any investment decisions.
Tether’s decision to resume lending its stablecoin to customers also raises questions about the stability of its reserves and the potential impact on the market.
As the crypto industry continues to evolve, it is essential for regulators and market participants to address these concerns and ensure transparency and accountability within the ecosystem. Only then can investors have confidence in the stability and legitimacy of cryptocurrencies like Tether.
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