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Alameda Research is under the spotlight for allegedly minting $39.55 billion of Tether’s USDT stablecoin. This staggering sum accounts for nearly half of Tether’s current circulating supply and raises serious questions about the governance and transparency of both Alameda and its affiliated trading platform, FTX.
Conor Grogan, Director of Coinbase, blew the whistle on Twitter, highlighting that Alameda was responsible for creating $39.55 billion worth of USDT. This accounts for almost 47% of Tether’s current circulating supply. An earlier report by Protoss had pegged this figure around $36.7 billion, but Grogan updated these numbers with additional wallet data.
Onchain data shows that Alameda was responsible for minting $39.55B of USDT, a number that is 47% of Tether's circulating supply today
— Conor (@jconorgrogan) October 9, 2023
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
It’s worth noting that the amount of minted Tether exceeds Alameda’s assets under management (AUM) during the peak of the cryptocurrency market. These revelations could potentially unmask a series of inter-company dealings designed to use customer deposits to offset trading losses.
Critics are now scrutinizing the relationship between Alameda and FTX. Grogan highlighted the difficulty in assessing redemptions due to Tether’s off-chain coordination of burns. Unlike other stablecoins, Tether doesn’t employ deposit addresses, complicating the tracking of funds. According to estimates, 3.9 billion USDT in redemptions occurred within two days in May during the Luna market turmoil.
The Sam Bankman-Fried Scandal and Future Implications
Adding fuel to the fire, FTX founder Sam Bankman-Fried is currently embroiled in a fraud trial. Caroline Ellison, his ex-girlfriend, is slated to take the witness stand this week. Her testimony could spill more details on the inner operations of FTX and Alameda, escalating the gravity of these allegations.
On a related note, Tether has resumed its lending operations a year after suspending them. It’s aimed at protecting their long-standing customers from liquidity shortages. Tether also recently took an undisclosed stake in German-based crypto miner Northern Data Group, signaling its ambitions in the AI sector.
Market Implications
Interestingly, amidst this chaos, the amount of Tether on exchanges has reached a multi-month high. This suggests that traders are still bullish on the market, but it also shows the central role Tether plays, thereby amplifying the potential impact of these allegations.