Stablecoin Heavyweights Circle and Tether Distance Themselves From FTX, Alameda

FTX was one of the investors in Circle's financing round of $440 million last year.

AccessTimeIconNov 9, 2022 at 7:22 a.m. UTC
Updated May 9, 2023 at 4:01 a.m. UTC
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Circle and Tether, the firms behind stablecoins USDC and USDT, respectively, distanced themselves from crypto exchange FTX and trading firm Alameda Research as the crypto market grapples with the fallout from FTX's fall from grace.

Circle CEO Jeremy Allaire took to Twitter to explain the firm's relationship with the two companies. Allaire said Circle has never given loans to FTX or Alameda and has never received FTT as collateral. Allaire added that both Circle and FTX hold only a small portion of equity in each other.

Paolo Ardoino, chief technology officer of Tether, was even more direct.

"To be clear: #Tether does not have any exposure to FTX or Alameda. 0. Null," he tweeted.

The responses came after FTX said it had agreed to sell itself to rival Binance in a last-ditch effort to avoid collapse. This raised questions around the state of FTX's investment in other crypto firms.

Circle had completed a $440 million financing round in 2021, which involved several investors, including FTX.

The crypto industry's heavyweights have been eager to disassociate themselves from the downfall of FTX. Nasdaq-listed exchange Coinbase (COIN) said Tuesday that it has "minimal exposure" to its peer and no exposure to its native token FTT.

"There can't be a 'run on the bank,' Coinbase said in a statement, pointing to its publicly filed and audited reports show how all customer assets are fully backed.

UPDATE (Nov. 9, 09:50 UTC): Adds response from Tether, link to the Coinbase story.

UPDATE (Nov. 9, 10:16 UTC): Changes headline, first paragraph.


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