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Tether (USDT) Briefly Depegs on Rumours of Alameda On-Chain Short

Cointime Staff· 2 min read

USDT briefly slumped by 6% on the Kraken crypto exchange following an alleged arbitrage attempt by Alameda on Aave and Curve Finance.

Amidst the disturbing saga on FTX and Alameda Research arose Tether (USDT) FUD on Thursday as the largest stablecoin by market capitalisation momentarily depegged from its $1 threshold.

USDT Dropped Over 6% on Kraken

Around 1:25 PM UTC Thursday, Coinmarketcap reported a 1.82% decrease in USDT price to $0.9818. Several crypto exchanges, including Binance, record varying deviations of USDT price sub $1, but Kraken remarkably recorded a flash drop to $0.9381, representing over a 6% decrease from the usual price.

The incident spooked crypto investors even more, with many questioning what financial relationship Tether shares with Alameda. It was later rumoured that Alameda may have caused the drop in USDT’s price.

Crypto analysts, including popular trader Hsaka, accused Alameda of trying to short USDT on-chain to initiate price depeg for alleged arbitrage profits.

The trading company owned by Sam Bankman-Fried reportedly moved about $300k worth of USDC to Aave protocol, which it used to borrow $250k worth of USDT. Thereafter, Alameda moved the USDTs to sell/dump in exchange for USDC on Curve Finance.

Right now, USDT is back trading at $1 on Coinmarketcap and $0.997 on the Kraken exchange, which was quite expected, counting on Tether’s attestations that USDT is always redeemable for $1.

The latest Tether attestation report shows the company’s consolidated assets surpass its liabilities. USDT’s consolidated total assets as of 30 September were at $68.06 billion, while the liabilities (relating to USDT issued) summed to only $67.8 billion.

Tether Does Not Have Plans to Lend Money to Alameda or FTX

Elsewhere, Tether’s CTO Paolo Ardoino had stated that they do not have any exposure to either Alameda or FTX. In a more recent tweet, Ardoino reiterated that “Tether does not have any plans to invest or lend money to FTX/Alameda.”(By Ibiam Wayas )


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