Tether, the issuer of the market’s first stablecoin, USDT, claimed that it was not exposed or Genesis Global Capital nor to Gemini Earn. Some, however, wonder how a company the size of Tether was able to escape all the negative events that rocked the crypto space this year.
The company said in a statement that “business continues as usual”:
“With the recent information surfacing around Genesis today, Tether would like to confirm that it has absolutely no exposure to Genesis or Gemini Earn.”
According to the statement, USDT tokens are 100% backed by its reserves, and the assets backing these reserves exceed the liabilities. The Company’s portfolio includes cash, cash equivalents and US Treasury bills.
The company also said:
“It’s important at a time like this to point out that these reserves have proven themselves by showing consistent resilience during the ‘black swan’ events that have characterized the market this year.”
As noted, the crypto lending division of Genesis Trading, Genesis Global Capitalwho belongs to Digital Currency Group (DCG), the parent company of Grayscale Investmentsas well as the crypto exchange Gemini would be among the last victims of the bankruptcy of FTX.
Genesis on Wednesday announced it was suspending redemptions on its loan product and stopping issuing new loans. She claimed that Genesis’ trading and custody business was unaffected.
Shortly after, Gemini also announced that it was stopping redemptions on its product. Gemini Earn. Genesis provides services to Gemini. “This action does not impact other Gemini products and services,” the company said.
Some question Tether’s claims, arguing that given the scale of events around Terra and FTX, it is almost impossible not to have been affected, for exampleAdam Cochrancrypto researcher and venture capital fund partner Cinneamhain Ventures. Cochran has tweeted that many companies claimed not to have exposure to distressed companies such as FTX, Terra, Celsius, Three Arrows Capitaland more recently BlockFihowever :
“It’s almost mathematically impossible for that to be true,” Cochran asserted.
others support that all of those companies that claim to be unaffected have in fact been indirectly exposed – “which is tantamount to being exposed”.
Nevertheless, many people maintain that their companies are indeed among those “impossible” cases, such as Vlad Andreyfounder and managing partner ofAlbaron Venutersan investment company specializing in companies and projects related to fintech, blockchain, decentralization, digital currencies and crypto-assets.
As reported, last week Tether froze $46.5 million worth of USDT, apparently at the request of law enforcement. USDT was held on the Tron blockchain in a wallet owned by the exchange.
At the time of the operation, Tether had already claimed that it “had absolutely no credit” with FTX or its parent company. Alameda Researchand that it “is absolutely not exposed” to these two companies.
Tether might also face a few legal issues. the US Department of Justice reportedly reopened an investigation into whether its executives committed bank fraud in the early days of the stablecoin’s creation. But the company denied the reports: “Bloomberg recycles old news that is not factual. This is yet another example of incompetence and their inability to separate fact from falsehood.”
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