Tether Reported Risky Loans For Its Stablecoins
USDT, after the collapse of TerraUSD, was one of the currencies that investors wanted to reveal its reserves. According to the Wall Street Journal, Tether, the company that issued the USDT stablecoin, has been operating without transparency.
It was uncovered that the company has been lending its token to customers rather than selling it for cash. It has also declined to divulge all of the loans it has made using the stablecoin. Because the issuer failed to be more transparent, the accusations are raising concerns about the stability of USDT.
The unfavorable market trend, which many feel has reduced the collateral of the stablecoin, is spreading contagion from the FTX crisis.
Tether’s USDT are the most widely adopted stablecoins, having pioneered the concept in the digital token space. A disruptor to the conventional financial system and a trailblazer in the digital use of traditional currencies, USDT support and empower growing ventures and innovation throughout the blockchain space. USDT exist as a digital token built on multiple blockchains.
Tether, the cryptocurrency exchange OKX, and the venture capital firm Sequoia Capital are among the businesses that Bankman-Fried is said to have approached for funding. It is said that he has requested at least $1 billion from each of the organizations. The sentiment was expressed in a blog post by Tether on November 9 assured the community that it has no exposure to Alameda or FTX.
In November, Tether’s CTO, Paolo Ardoino, confirmed the company has “no plans to invest or lend money to FTX/Alameda.”
Currently, the company has not yet responded to these reports, Coincu will continue to update the latest situation as more information becomes available.
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