Reports indicate that during the pinnacle of the cryptocurrency market, Alameda Research orchestrated the issuance of Tether’s USDT tokens in an amount exceeding the entirety of assets under its management, raising questions about the legitimacy of their operations.
Coinbase’s Director, Conor Grogan, has brought to light a series of dubious activities associated with FTX and its affiliate, Alameda Research, in relation to the minting of Tether’s USDT stablecoin.
According to on-chain data analysis, Alameda’s involvement in the creation of USDT amounted to a staggering $39.55 billion. This accounts for approximately 47% of the total Tether circulating supply.
An earlier report from Protoss had estimated this figure to be around $36.7 billion. However, Conor was able to refine this estimate by identifying additional wallets participating in the process.
This revelation sparks concerns about possible irregularities in the transactions between Alameda and FTX. It appears that customer deposits were used to mitigate their financial losses and engage in trading.
This situation is particularly disconcerting due to Alameda’s questionable reputation and the fact that Tether has never undergone an independent audit.
Alameda’s Enigmatic $40 Billion Tether USDT Creation and Tether’s Cryptocurrency Ventures
According to data shared by Sam Bankman Fried, it has been revealed that Alameda produced a larger volume of USDT than the total assets they managed during the cryptocurrency market’s peak. Conor highlighted the challenge of precisely assessing redemptions, primarily because Tether coordinates its coin burns off-chain.
Rather than utilizing deposit addresses, Tether opts for a direct transfer of funds to its treasury. If we make the assumption that all USDT redemptions from FTX indeed originated from Alameda, not another market maker, it becomes evident that approximately 3.9 billion USDT were redeemed.
This redemption process predominantly took place over a two-day period in May, coinciding with a turbulent phase in the Luna market.
These recent developments align with the ongoing fraud trial of Sam Bankman-Fried, the disgraced founder of FTX. His ex-girlfriend, Caroline Ellison, is scheduled to testify this week.
Ellison’s testimony has the potential to provide additional insights into the internal operations of FTX and its association with Alameda.
Tether’s Resurgence: USDT Lending Revival, AI Exploration, and Crypto Trader’s Empowerment
In another significant development, it has come to attention that Tether has discreetly reinstated its practice of lending USDT stablecoins. This decision comes a year after suspending its secured loan services.
The strategic objective here is to protect the interests of long-standing customers. This is achieved by reducing the risk of liquidity shortages and avoiding the need to sell assets at unfavorable rates.
Interestingly, Tether is also venturing into the realm of artificial intelligence. Merely two weeks ago, Tether made an undisclosed investment in the German-based cryptocurrency mining firm, Northern Data Group.
Meanwhile, the cumulative volume of Tether’s USDT stablecoins currently held on various exchanges has surged to a multi-month high. This surge suggests that cryptocurrency traders now wield greater purchasing power in the market.