Cointime

Cointime

Download App
iOS & Android

Tether: We Have No Exposure to FTX, Alameda or Genesis

Validated Media

The failure of FTX/Alameda is likely to be a watershed moment in the history of the cryptocurrency industry. In addition to being one of the largest financial failures, it has set off a daisy chain of leveraged failures cascading through the industry.

While there is still more to the story, and likely more counterparties who will emerge in the coming weeks, Tether wants to address one topic which has come to the surface following the failure of FTX.

It is well-known that Alameda was one of the larger issuers of USD₮, and due to this there has been ample discussion of whether the failure of Alameda represents a risk to Tether.

The short answer is: No

The long answer is as follows- 

Tether Issuance

What does it mean to be a large issuer of  USD₮? If someone issues a large amount of  USD₮ and goes bankrupt does that expose Tether's collateral?

USD₮ is issued when institutional parties send USD to Tether and Tether issues USD₮ on a 1:1 basis corresponding to the amount of USD sent to Tether. Tether then converts this USD into reliable, liquidity and conservative collateral ( US Treasuries, etc).

All USD₮ is fully collateralized by Tether's reserves and every USD₮ can be redeemed 1:1 with USD.

What does it mean that Alameda issued USD₮? It means they sent Tether USD, and Tether issues USD₮. Those reserves are still in Tether's possession; they are not on Alameda's balance sheet. The collateral backing Alameda's USD₮ is not on Alameda's balance sheet.

What can Alameda do with their USD₮? Their only option is to redeem any  USD₮ they have for USD via Tether's redemption facility. This is the same as any other  USD₮ holder around the world.

Lending, Leverage and Liabilities

Did Tether lend Alameda any USD₮ or other funds? No, Tether has no outstanding loans of USD₮, of Tether's reserves, or of any other funds whatsoever.

The main problem countless other companies are facing is that they recklessly lent Alameda various assets relying on extremely illiquid collateral. Since Alameda cannot repay those loans at this time, those companies have a hole on their balance sheet. This is not how USD₮ issuance works, and is not behavior Tether engaged in with Alameda in any way.

Is lending part of the  USD₮ issuance cycle ever?The only time Tether engages in lending is, as the example of Celsius shows, when Tether has lent USD₮ to select customers based on over-collateralization with extremely liquid assets. We believe the approach of many lenders in this industry has been reckless, lending huge quantities of money, and accepting FTT (and other illiquid assets) and pinky swears as collateral. 

This is further validated by how despite the sudden unwinding of Celsius, Tether’s operations were not disrupted. In fact, even during the highly volatile conditions of Terra’s collapse, Tether was able to liquidate Celsius’s collateral with such precision that Tether was even able to return some of the collateral.

What about leverage? Leverage played a key role in the dramatic unwinding of FTX. Does Tether engage in any leverage activity, leverage trading or collateralized borrowing against Tether's reserves? 

No.

Tether does not take highly leveraged directional bets on digital assets as part of its operations.

Solana Suspensions

Binance recently temporarily suspended USDC and  USD₮ deposits on the Solana Blockchain. OKX did as well. Why is this? Is there a risk inherent to Solana USD₮?

No

USD₮ issued on Solana is the same as USD₮ issued on any other chain. The token simply represents a claim to $1 of Tether's reserves and collateral. Alameda's heavy involvement in Solana doesn't impact the underlying dynamics of how USD₮ functions and USD₮ issuance works whatsoever.

The move to suspend  USD₮ deposits on these exchanges is likely just due to the heavy connections between FTX, Alameda, and Solana. If holders of USD₮ want to redeem USD₮ with Tether, they still can.  USD₮ on Solana is equivalent to USD₮ on any other Blockchain, it is not issued by Solana and is not reserved by Alameda or FTX.

8 Years of Stability 

Tether has been designed to withstand staggering volatility in cryptocurrency markets. While the FTX situation has been unique in many ways, it does not represent a threat of a risk to Tether or USD₮.

Tether continues to function normally and process redemptions whenever they are requested. Tether has no exposure to FTX or Alameda (and zero exposure to Genesis as well).

We look forward to continuing to provide investors with a reliable tokenized dollar as they navigate these challenging times. 

Tether FTX USDT
Comments

All Comments

Recommended for you

  • Amazon Shares Surge 15.2%, Biggest Gain Since 2012

    On July 31, Amazon shares surged 15.2% to $271.255 per share, marking their biggest gain since 2012, with a total market value of $2.92 trillion.

  • US Treasury Secretary Bessent Vows to Track Down Iranian Assets Globally for Terror Victims

    US Treasury Secretary Bessent said the US will actively track down Iranian assets worldwide to ensure compensation funds for victims of Iran-backed terrorist activities. Bessent stated that the US government's military and economic blockade measures against the Iranian regime will continue and will not be relaxed. (Jinshi)

  • Apple Plunges Nearly 10%, Q4 Revenue Guidance Misses Expectations

    On July 31, Apple (AAPL.US) plunged nearly 10% to $300.33, marking its biggest drop since April 2025. In terms of fundamentals, Apple's third-fiscal-quarter revenue rose approximately 16% year-over-year to $109.42 billion, slightly above analyst expectations. Among the details, product revenue came in at $78.68 billion, beating the expected $77.25 billion. However, services revenue—a key driver of its valuation re-rating in recent years—totaled $30.74 billion, missing the consensus estimate of $31.36 billion. Additionally, Greater China revenue reached $18.82 billion, with year-over-year growth slowing to 22%, also below analysts' forecast of $19.58 billion. During the earnings call, Apple guided fourth-fiscal-quarter revenue growth in the range of 9% to 11%, overall below the 12.1% analysts had expected. CFO Parekh noted that component supply constraints would impact iPhone, Mac, and iPad businesses in the fourth fiscal quarter, with currency fluctuations also constraining growth.

  • Three Fed Officials Back Rate Hike, Hawkish Pressure Builds

    On July 31, three Federal Reserve policymakers said that dissenting votes in favor of a rate hike this week stemmed from stubborn inflationary pressures, highlighting rising internal pressure on Fed Chair Warsh to act. In statements released Friday morning, Hammack and Kashkari said they worry that although the current round of price increases may stem from short-term factors such as President Trump's tariff policies and the Iran war, the inflation situation already warrants Fed action. Logan also joined in, saying that even if inflation cools, if the Fed does not raise rates, inflation is unlikely to fully fall back to the Fed's 2% target; without any policy constraints, inflation could continue to run above target until an unexpected shock occurs. Kashkari said that if inflation remains persistently stubborn, he might support a series of rate hikes, not just a single increase, to prevent inflation from becoming further entrenched. He said: "A series of small policy adjustments may be preferable to waiting for developments to unfold and ultimately having to take more forceful action." Hammack said that if the Fed does not tighten policy, price increases could continue to accelerate. She said: "Inflation has been stubbornly above 2% for more than five years, and I have no confidence that it will return to our target on its own." (Jin Shi)

  • US 10-Year Treasury Yield Rises to 4.7388%, Highest Since January 2025

    On July 31, the US 10-year Treasury yield rose to 4.7388%, the highest level since January 2025.

  • Spot Gold Intraday Decline Widens to 2%, at $4,021.08 per Ounce

    On July 31, spot gold's intraday decline widened to 2%, reported at $4,021.08 per ounce.

  • BTC Falls Below $63,000

    Market数据显示，BTC has fallen below $63,000, currently reported at $62,985.99, with a 24-hour decline of 2.99%. Market volatility is significant, please exercise risk control.

  • Fed's Logan: Leaning Toward 25 Basis Point Rate Hike

    On July 31, Federal Reserve Governor Logan said she leans toward a 25 basis point rate hike, believing inflation has not yet entered a sustainable path back to the Fed's 2% target. Logan stated that taking moderate action now would reduce the risk of needing more aggressive tightening in the future, while emphasizing that the Fed cannot rely on unexpected shocks to achieve its inflation target.

  • Fed's Logan: Taking Modest Actions Now Reduces Likelihood of Needing Stronger Action Later

    On July 31, Dallas Fed President Lorie Logan said that taking modest actions in the near term would reduce the likelihood of needing to take stronger action in the future.

  • Philadelphia Semiconductor Index Erases 5% Gain, Turns Lower

    On July 31, U.S. chip and semiconductor stocks rapidly weakened, with the Philadelphia Semiconductor Index wiping out a 5% gain and turning lower. Micron Technology, which had risen 6%, is now down 4.2%. SanDisk, which had gained nearly 10%, is now down over 6%. SK Hynix and Seagate Technology, which had risen over 8%, are now down 2%. TSMC, which had gained 4%, is now down nearly 1%.

Daily Must-Read

Popular Activities

RaveDAO at Terra Solis by Tomorrowland: A Female-Led Techno Night Where Web3 Culture Converges

RaveDAO at Terra Solis by Tomorrowland: A Female-Led Techno Night Where Web3 Culture Converges

April 30 - April 30
Dubai

Popular Tags

Cointime
News
Contents
RSS
Company