Tether Freezes Over $46M of FTX’s USDT

Centralized stablecoin issuer Tether has frozen funds belonging to FTX.

Funds Locked

According to data from Whale Alert, at least 46,360,701 USDT of FTX’s funds was frozen today at 14:11 UTC.

While neither Tether’s official Twitter account nor the company’s CEO Paolo Ardoino have publicly disclosed the reason for the freeze, crypto news account db claims the blacklist was issued at the request of law enforcement. FTX is now reportedly under investigation.

FTX is one of the leading cryptocurrency exchanges in the world. Due to doubts surrounding the solvency of Alameda Research, an affiliated quant trading firm, FTX ended up being the subject to a “bank run” in the last few days; the exchange unofficially paused withdrawals on Tuesday and sought external help in plugging the rapidly growing hole in its balance sheet, currently rumored to be worth approximately $10 billion.

Lead cryptocurrency exchange Binance initially announced it would be acquiring FTX to insure customers would be made whole, but walked away from the deal yesterday, citing concerns over misuse of client funds by FTX.

While still unconfirmed, rumors are circulating that FTX may have used customer funds to shore up Alameda Research liquidity in May or June following the brutal market downturn caused by the Terra crash, Three Arrows Capital wipeout, and subsequent contagion across the crypto industry.

This is a developing situation.

Disclaimer: At the time of writing, the author of this piece owned BTC, ETH, and several other cryptocurrencies.