- The manner in which transactions between Alameda Research and FTX were executed is questionable.
- Adding to the intrigue is the fact that Tether has never undergone an independent audit.
Alameda Research, a major player in the cryptocurrency space, has come under scrutiny for creating Tether’s $40 billion. [USDT] stable currency. This massive issuance represents approximately 47% of Tether’s current supply, raising questions about the transparency of these transactions.
The revelation came to light via on-chain data and was further substantiated by Conor Grogan, director of Coinbase. Initial estimates from Protoss put the amount at around $36.7 billion, but Conor’s findings, including additional portfolio discoveries, pushed the figure even higher.
Data from Onchain shows that Alameda was responsible for generating $39.55 billion in USDT, a number that today represents 47% of Tether’s circulating supply.
A previous report from Protoss estimated this number at approximately $36.7 billion; I was able to update these numbers with additional wallets I found pic.twitter.com/fYBvGAYlFd
— Conor (@jconorgrogan) October 9, 2023
What is concerning is the manner in which these transactions between Alameda Research and FTX, its sister company, were conducted. They reportedly used customer deposits to offset their losses and engage in trading activities. Such practices have drawn criticism, especially given Alameda’s questionable reputation in the industry.
Adding to the intrigue is the fact that Tether, despite being a widely used stablecoin, has never undergone an independent audit. This lack of transparency has long been a point of contention in the cryptocurrency community.
Reports raise concerns about transparency
Conor Grogan pointed out that assessing redemptions in this context is challenging due to Tether’s off-chain coordination of burns. Unlike traditional cryptocurrencies that use deposit addresses, Tether relies on direct fund transfers to its treasury. This makes it more difficult to track the money flows.
A key observation was that during the peak of the cryptocurrency market, Alameda generated more USDT than the total assets under its management. This raises eyebrows and raises further questions about the nature of these transactions and their impact on the broader cryptocurrency ecosystem.
The timing of this revelation coincides with the ongoing fraud trial against Sam Bankman-Fried, the founder of FTX. He faces charges related to fraudulent activities.
Another twist in the Tether saga was the decision to quietly resume lending its USDT stablecoins. This move comes a year after Tether stopped offering secure loans. The rationale behind this decision is to protect existing customers from liquidity shortages or the need to sell assets at unfavorable rates.
Tether’s foray into the AI space is yet another development that has raised eyebrows within the cryptocurrency community. Recent reports suggested that Tether had done just that taken an undisclosed stake in Germany-based crypto miner Northern Data Group. This strategic move signals Tether’s ambition to diversify its holdings beyond the realm of stablecoins.
Interestingly, the total supply of Tether USDT stablecoins on exchanges has reached a multi-month high. This indicates greater purchasing power among cryptocurrency traders, possibly influenced by Tether’s strategic decisions and market dynamics.
