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As investigators around the world try to gather facts about the FTX and Alameda implosion, stablecoin issuer Tether (USDT) has claimed that SBF, the CEO of FTX, requested a bailout in the billions before filing for bankruptcy protection.
According to a report by Forbes, SBF reportedly wanted Tether to return a favor as one of its largest clients. Moreover, FTX had minted over $36 billion in USDT, almost half of Tether’s entire circulating supply, during its peak-performing period.
Nonetheless, Tether officials declined the request after SBF reportedly declined to outline the details of the economic help he needed. According to Paolo Ardoino, Tether’s Chief Technology Officer, SBF sounded uneasy with the request, which was never the case before.
“He suddenly asked for something that he had never asked for before, and he wasn’t talking about $10 million. The way he was talking suggested that he had a big issue. His request was in the billions,” Ardoino said.
The requests by SBF are not outrageous as he publicly requested bailout funds from the Binance cryptocurrency exchange. However, while Binance CEO Changpeng Zhao (CZ) declined the bailout, FTX’s FTT token plummeted drastically in a few hours, liquidating billions of dollars.
Tether intends to clarify its relations with FTX and SBF as investigators close in on blockchain activities that led to the exchange’s collapse.
Moreover, blockchain data suggests that Tether could have minted for SBF’s companies as high as $500 million in a single transaction. As such, calls for a Tether USDT audit have increased lately to ensure that every minted stablecoin is redeemable.
A Call For Transparency
Following the sudden collapse of FTX and its native token FTT, crypto traders have become cautious about holding and trading most altcoins. As a result, calls for greater transparency have increased, despite the fact that most crypto companies operate on public blockchain technology. Furthermore, Coingecko has been listing the availability of crypto exchanges’ reserve data.
However, crypto traders remain skeptical about security even with reserve data publicly available. Additionally, centralized exchanges hold the keys to users’ coins and can potentially withdraw funds without warning. As a result, decentralized exchanges and non-custodial wallets have gained popularity in recent weeks, as seen with Binance-backed Trust Wallet and its TWT token.
Meanwhile, Tether (USDT) is expected to remain on regulators’ watchlist due to its control over minting programs, similar to the Federal Reserve. However, the creation of the digital dollar is expected to bring more stability and reduce irregularities in the stablecoin industry.