The company behind the USDT stablecoin Tethercontinues to lend more, rather than sell crypto assets for cash. Despite these loans, the company prefers not to be transparent by not disclosing the details. As this was the case, concerns about the company increased.
The Chapter 11 bankruptcy filing of the FTX exchange has raised concerns within Tether. It is believed that the decline in the market may have weakened Tether’s collateral.
Tether co-founder Reeve Collinsresponded to the allegations on CNBC’s SquawkBox.
In his defense, Reeve stated that the company has posted the reserve evidence on its official website. Users have the chance to check and verify them if they wish. In addition, Tether is audited every few months to ensure that government officials understand how funds are managed and invested.
Reeve referred to the company’s history over the past 8 years. In Tether’s operational history, it “always used each token for exactly $1”.
As a matter of fact, although Tether did not fully answer some questions, it claimed that it would be more transparent than names such as FTX and BlockFi as soon as possible.
Tether Uncertainty Rises After FTX Crash
It is a known fact that there have been problems between regulators and Tether for a long time. Even during the Terra-Luna crisis and the 3AC-led market crash, doubts remained about Tether’s reserves.
As a result after FTX’s bankruptcy USDT stablecoin lost its stability, albeit for a short time.
You can follow the current price action here.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.