The issuer of the first stablecoin on the market, Tetherfroze $46.5 million worth of USDT belonging to the crypto exchange FTXon the verge of bankruptcy, apparently at the request of law enforcement.
Specifically, it’s USDT held on the Tron blockchain in a wallet owned by FTX, according to block explorer Tronscan.
This wallet contains 46,549,320 USDT, as well as TRX, USDD and other tokens, with a total value of $66.4 million.
The reason given by Tether seems to be legal.
CoinDesk quoted a Tether official as saying that the company “would have received requests from the authorities for the temporary freezing of assets while the investigation unfolds.”
A spokesperson for Tether said the firm is in constant dialogue with regulatory bodies, specifically naming the US Department of Justice (Department of JusticeDOJ).
As noted, the DoJ and the Commodity Futures Trading Commission (CFTC) of the United States are currently investigating FTX. The Securities and Exchange Commission (SEC) has reportedly already conducted several investigations into FTX’s handling of client funds and its crypto lending activities for several months, while also examining the relationship between FTX and FTX US.
Tether claims to have no connection with FTX
Rumors have swirled about possible connections between Tether Global and FTX and its parent company Alameda Research. The company, however, released a statement on Wednesday saying that,
“Tether has absolutely no exposure to Alameda Research or FTX and has no credit with either company.”
In addition, the technical director of Tether, Paolo Ardoinotweeted that the company will not provide any financial support to FTX.
Tether further reaffirmed that the majority of its reserves are now made up of US Treasuries.
In a statement on Thursday, it “highlighted a massive reduction in commercial paper which represents only 0.07% of reserves”, adding that it reduced its exposure to commercial paper by more than $24 billion without any loss in the year 2022.
No parity loss for USDT
Meanwhile, data from CoinGecko showed that USDT fell 4% from its $1 peg on Wednesday. Observers attributed the fall to possible contagion resulting from the FTX situation.
However, in a statement released on Wednesday, Tether claimed that the irregularity was due to a problem with the data coming from the connection of the application programming interface. [API] from CoinGecko with a few exchanges, adding, “Tether hasn’t lost its peg. The USDT price gap only existed on this platform, whereas on Binance, Bitfinex and Coinbaseit was trading less than 10bps from parity.”
As for FTX’s native FTT token, it is down 30% in the last 24 hours and is down 89% over a week, currently trading at $2.66.
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