Stablecoin Giants Tether, Circle Disclose Financial Relationship With FTX, Alameda

Amid the chaotic meltdown, asset movement from Circle to FTX surfaced. It was also reported that Alameda could be the second-largest issuer of Tether.

CEO of USDC issuer, Jeremy Allaire, assured the community that Circle has no material exposure to the troubled firms. Tether’s chief technology officer Paolo Ardoino also spoke on the matter.

Circle’s Jeremy Allaire Dispels Rumors

As the company distanced itself from the chaotic turn of events, Allaire said FTX has been a customer of Circle Payment APIs for more than a year and provided card and ACH services for client transactions. He added that Circle’s crypto payments beta product uses FTX and other exchanges for BTC/ETH liquidity.

Alameda, on the other hand, has been a firm customer for many years and leverages its USDC service for creating and redeeming the stablecoin. Allaire revealed that Circle has never made loans to SBF’s two companies and has never received FTX’s native token, FTT, as collateral, nor has it ever held a position in or traded FTT.

“Circle is a tiny equity holder of FTX, and FTX is a tiny equity holder of Circle. Circle is also a tiny equity holder of Kraken, Coinbase, and BinanceUS. 00% of USDC flows from Circle to FTX or Alameda are responsive to our ToS and automated systems of 1:1 dollar settlement to mint USDC and redeem USDC.”

While dispelling FUD about Silvergate and risks for USDC, the exec said the crypto bank is one of more than 10 entities that Circle is engaged with globally and holds a small portion of the stablecoin cash reserves with it to support USDC settlement flows with their users.

Tether’s CTO Follows Suit

Tether CTO, Ardoino clarified that the stablecoin issuer does not have any exposure to either of the distressed companies. While Alameda has previously redeemed a lot of USDT, the exec asserted that no credit exposure has matured.

Coinbase CEO Brian Armstrong also affirmed on Tuesday that his crypto platform is not vulnerable to a similar crisis.

Despite the executives’ clarification, community members are not satisfied. While one user asked for a “proper document statement” backing the claims, others have expressed their anger towards SBF and called for accountability.

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newsby.top • 2022