- In the past week, Tether has blocked $31.4M USDT after the hack of FTX. Tether has remained unaffected by the recent falls.
- Tether has maintained its dominance in the crypto-verse. Despite Alameda being one of the largest issuers of USDT, Tether remains the same as before
The collapse of the FTX has been one of the worst moments in crypto history. Despite being a colossal failure, it has created a domino effect that has affected various other companies. One of the companies which have come to the limelight is Tether. Alameda was one of the largest issuers of USDT. Due to this, many are asking questions about the effect of Alameda on the Tether. But before diving into the details, let’s look at some of the past events to gain a better understanding.
Tether has blocked $31.4M USDT after the FTX hack. They also did a chain swap from Solana Blockchain to Ethereum Blockchain of around $1 Billion. Tether has always remained pegged with the USD and protected their users’ funds with full collaterals. They have withstood the crypto market volatility for the past 8 years and can continue to do the same in the future.
Is Tether Leveraged On Alameda And Solana?
Before Diving into the other things, let’s first understand the issuance of USDT. A USDT is issued when institutional parties send USD to Tether. After it, Tether issues USDT on a 1:1 basis corresponding to the amount of USD sent to Tether. Then they convert this USD into reliable, liquid, conservative collateral ( US Treasuries). So whatever the USD sent by Alameda, they have issued 1:1 USDT to them.
Meanwhile, the assets sent by Alameda are still under the control of Tether. Alameda can redeem their USD by sending back the USDT. This overall process does not affect the issuance of USDT.
Many have argued that Tether has lent USDT to Alameda, like Celsius. This can be far from the truth. Per their balance sheet and audits, they have no outstanding loan to Alameda. Tether has only loaned USDT to some of their selected customers for liquid collateral. They have also not engaged in leverage trades like FTX.
There has also been a rumor in the market that there is an inherent risk to Solana USDT. USDT issued on the Solana blockchain is the same as the other blockchain. They did a chain swap to Ethereum due to the strong involvement of SOL with FTX and Alameda.
Conclusion
Tether has remained the stablecoin market leader for the past 8 years. They remained unaffected by crypto volatility and have delivered the best to their users. FTX contagion has affected various companies, but Tether is not one of them. They have remained stable, and their issuance and collateral remain undamaged. Tether has been subject to a lot of FUD but has remained unaffected.
Source: https://www.thecoinrepublic.com/2022/12/01/usdt-remains-unaffected-from-ftx-and-alameda-collapse/