In 2019 Tether got away with a flagrant misrepresentation about the status of its stablecoin reserves. This dubious behavior did nothing to dissuade the cryptocurrency industry from embracing Tether, which remains the stablecoin market leader. It set an example for what is considered acceptable in the industry. And here we sit in the middle of the FTX saga.
Former FTX CEO Sam Bankman Fried (SBF) is very familiar with Tether because his other company Alameda was the second-largest distributor of Tether. In other words, when Tether is minted, about a third has gone to Alameda.
There are parallels between Tether’s business structure and SBFs. Tether is owned by Giancarlo Devasini, who also owns the cryptocurrency exchange Bitfinex. In Tether’s case, it used the reserves from the stablecoin to prop up the crypto exchange. SBF also owned a crypto exchange, but instead, his other ‘independent’ business was the proprietary trading firm Alameda. And it appears he used the exchange to prop up Alameda.
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