Tether and Circle, the companies behind the two most popular stablecoins, have distanced themselves from the FTX debacle and have claimed they have no connection to either Alameda Research or the faltering cryptocurrency exchange.
Tether CTO Addresses FTX Fallout
Responding to a Wu Blockchain tweet, Tether’s CTO Paolo Ardoino stated that the USDT issuer had no exposure to FTX or Alameda.
While Alameda has historically issued and redeemed a significant amount of USDT, according to Ardoino, the stablecoin issuer has no credit exposure that has grown with the faltering crypto trading firm.
He continued by saying that Tether is issued and redeemed based on market demand from our consumers.
Circle Co-founder Reassures Investors
In an effort to allay market participants’ concerns and uncertainties, Circle’s co-founder and CEO, Jeremy Allaire, also created a thread outlining the link between FTX and Circle.
In the thread, he claims that Alameda has been creating and redeeming USDC using Circle for many years, and that FTX has been using the Circle Payments API for 18 months.
In the fourth point of his thread, he clarified that Circle has never given loans to FTX or Alameda, never accepted FTT as security, and has never traded or maintained positions in FTT. That thread went on to say that Circle does not trade on its own account, anyway.
Circle And FTX Own Stakes Of Each Other
He added that Circle has a little equity in FTX, the same as in other exchanges like Coinbase, Kraken, and BinanceUS, and FTX also owns a small stake in Circle.
Alameda Research recently transferred millions of USDC to FTX, and in response, Allaire asserted that the transactions were in accordance with the terms of settlement and “automatic systems of 1:1 dollar settlement to mint USDC and redeem USDC.”
He also addressed the fear and doubt surrounding Silvergate, pointing out that the institution is merely one of more than ten institutions worldwide that have USDC cash reserves.
About 80% of Circle’s assets are held in BNYM’s custody and are US Treasury Bills with a maturity of three months or less.
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