As investigators around the world try to gather the facts about the implosion of FTX and Alameda, stablecoin issuer Tether (USDT) has filed for bankruptcy protection before FTX CEO SBF filed for bankruptcy protection. It claimed to have asked for a billion dollar bailout.
According to a Forbes report, SBF reportedly hoped to return the favor to Tether as one of its largest clients. Additionally, during its peak performance period, FTX minted more than $36 billion in USDT, nearly half of Tether’s total circulating supply.
Nevertheless, Tether officials denied the request after SBF reportedly refused to outline the details of the financial assistance he needed. And SBF was uneasy about this request, which had never happened before.
“He suddenly asked for something he’d never asked before, and it wasn’t about $10 million. The way he spoke suggested he was in big trouble. His demands were in the billions,” says Ardoino.
The request by SBF is not exorbitant, as it publicly requested relief funds from the Binance cryptocurrency exchange. However, Binance CEO Changpeng Zhao (CZ) refused to bail out, while his FTT token on FTX plunged sharply in a matter of hours, liquidating billions of dollars.
Tether is set to uncover its ties to FTX and SBF, and investigators are closing in on the blockchain activity that led to the exchange’s demise.
Additionally, blockchain data suggests that Tether could have provided SBF companies with as much as $500 million in a single transaction. As such, the demand for a Tether USDT audit has increased recently to ensure that all issued stablecoins are redeemable.
A call to transparency
After the sudden demise of FTX and its native token FTT, crypto traders have become cautious about holding and trading most altcoins. As a result, there is a growing demand for greater transparency despite the fact that most cryptocurrency companies operate on public blockchain technology. Additionally, Coingecko lists the availability of reserve data for cryptocurrency exchanges.
However, crypto traders remain skeptical of security even with preliminary data published. Additionally, centralized exchanges hold the keys to users’ coins and may withdraw funds without warning. As a result, decentralized exchanges and non-custodial wallets have gained popularity in recent weeks, as seen in Binance-backed Trust Wallet and its TWT token.
Tether (USDT), on the other hand, is expected to remain on the regulator’s watchlist because, like the Federal Reserve, it controls mining programs. However, the creation of a digital dollar is expected to increase stability and reduce irregularities in the stablecoin industry.
