Alameda Minted $40 Billion of Tether USDT in Shady Deals With FTX, Details

Director of Coinbase Conor Grogan has shed some light on some shady operations at FTX and its sister company Alameda Research over the minting of Tether’s USDT stablecoin.

According to on-chain data, Alameda was responsible for creating $39.55 billion worth of USDT, which accounts for approximately 47% of Tether’s current circulating supply. A prior report by Protoss had estimated this figure to be around $36.7 billion. However, Conor managed to update this figure with additional wallets found.

Onchain data shows that Alameda was responsible for minting $39.55B of USDT, a number that is 47% of Tether's circulating supply today

A previous report by Protoss estimated the number at around $36.7B; I was able to update these figures with additional wallets I found pic.twitter.com/fYBvGAYlFd

— Conor (@jconorgrogan) October 9, 2023

Thus, there’s information and evidence of questionable transactions between Alameda and FTX, where they use customer deposits to offset their losses and engage in trading. This is a matter of concern because of the questionable reputation of Alameda, and it raises further concerns as Tether has never undergone an independent audit.

As per data shared by SBF, Alameda generated more USDT than the total assets under its management during the peak of the cryptocurrency market. Conor pointed out that assessing redemptions is difficult, primarily due to Tether’s off-chain coordination of burns. Tether doesn’t employ deposit addresses; instead, shops send funds directly to the treasury.

Assuming that all USDT redemptions from FTX came from Alameda (and not another market maker), they redeemed approximately 3.9 billion USDT. This redemption, for the most part, occurred within a two-day period in May during the Luna market turmoil.

Tether, and SBF Trial Developments

These developments come as disgraced FTX founder Sam Bankman-Fried has been undergoing a fraud trial with ex-girlfriend Caroline Ellison to take the witness this week. Ellison’s testimony could further reveal more information regarding the inner workings of FTX and Alameda.

Another development suggests that Tether has silently started lending its USDT stablecoins, a year after it stopped offering secured loans.  Tether has resumed its practice of lending its stablecoin to its long-standing customers following a temporary suspension. This move is aimed at protecting these customers from liquidity shortages or the need to sell assets at unfavorable rates.

Interestingly, Tether is also making moves into the AI space. Two weeks back, Tether took an undisclosed stake in German-based crypto miner Northern Data Group.

Currently, the total number of Tether USDT stablecoins sitting on the exchanges has reached a multi-month high. This shows the increased buying power among crypto traders.

💸 The $9.99B worth of #Tether sitting on exchanges is the highest level of buying power for #crypto's top #stablecoin in approximately seven months. Since June 13th, these exchanges have seen a 40% increase in available $USDT. https://t.co/nx5Pbb1Oud pic.twitter.com/G9pINqzcg4

— Santiment (@santimentfeed) October 9, 2023