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Crypto Companies Scramble To Deny Ties To FTX And Alameda Research

In the aftermath of the solvency crisis that engulfed cryptocurrency exchange, FTX and related hedge fund Alameda Research, some of the largest cryptocurrency companies are facing calls for transparency to inform users of any risks. On the other hand, executives assured the community that they had no exposure to either of the troubled firms.

Changpeng Zhao, the CEO of rival exchange Binance, announced on Sunday that his company would liquidate its holdings of the FTX token due to unspecified “recent revelations.” Later, FTX CEO Sam Bankman-Fried clarified that the exchange was “fine” and that the “recent revelations” were “false rumors.”
On Tuesday, Binance announced that it would acquire FTX as news insolvency confirmed to be true, leading to the $FTT price losing approximately $90 percent of its value.

Coinbase Denies Exposure

Coinbase CEO Brian Armstrong went on Twitter to address concerns about the exchange’s exposure to FTX in the news of Binance’s FTX acquisition announcement, first expressing sympathy for everyone involved in the current situation with FTX.

As a company, Coinbase Global Inc assured investors that they would have little exposure to privately-held rival FTX after concerns about the FTX’s financials drove the price of its digital coin FTT to its lowest level since early 2021.

Tether And Circle Address Concerns

In light of the latest crypto news, Twitter users began questioning Circle and Tether’s involvement with FTX, with Colin Wu tweeting, “Circle and Tether should disclose more of their financial relationship with FTX Alameda to let users know if it’s a risk.” He added, “We are seeing a lot of assets move from Circle to FTX; there are also reports that Alameda is the second largest issuer of Tether.”

Tether’s CTO, Paolo Ardoino, went on to clarify concerns that the crypto community has raised in that the stablecoin issuer has had no exposure to either of the defunct firms. The most recent interaction being Alameda redeeming a large amount of Tether USDT, according to the executive.

Ardoino stated, “[Tether] does not have any exposure to FTX or Alameda. 0. Null. Maybe is time to look elsewhere. Sorry guys. Try again.”

Like Tether, Circle CEO Jeremy Allaire denied rumors that the company was exposed to FTX and Alameda. The stablecoin executive stated that their company has no material exposure to both companies. While both FTX and Alameda have been Circle customers, the stablecoin issuer has not made loans, received FTX tokens FTT as collateral, or taken any positions on FTT.

Allaire stated, “Circle has no material exposure to FTX and Alameda. FTX has been a customer of Circle Payment APIs for the past 18 months, providing card and ACH services for customer transactions. Circle’s crypto payments beta product uses FTX and other exchanges, for BTC/ETH liquidity.”


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