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Tether freezes $46 Million FTX-held USDT On Behalf of Law Enforcement

In the latest crypto news, Tether began freezing FTX’s USDT at the request of law enforcement authorities during an investigation. 

According to on-chain data, an unknown address with a balance of 46,360,701 USDT was frozen. The wallet was later confirmed to belong to FTX.

This operation took place just after the SEC confirmed that it was investigating the FTX exchange.

A Tether spokesperson told CoinDesk, “We are starting to receive requests from [Law Enofocement] to temporarily freeze assets while an investigation occurs.” The U.S. Department of Justice is one of the law enforcement agencies with which Tether has “open dialogue,” according to a spokesperson.

Tether Denies Ties To FTX Or Alameda Research

In a recent announcement posted on its website, Tether reiterated having no credit towards FTX and its affiliate firm, Alameda Research. Additionally, Tether said that it is working with Law Enforcement, stating, “Amid rumours of insolvency at crypto exchange FTX and worries about the financial conditions of Alameda Research, we would like to first and foremost, act as a mouthpiece for the entire crypto ecosystem and reiterate that one crisis does not make an industry.”

Tether USDT Depeg

It was also discovered that Alameda was actively swapping USDT for USDC via AAVE and SushiSwap. Initially, because USDT was slightly unpegged, it was suspected that Alameda was shorting USDT, and now it seems to be Alameda was trying to avoid the Tether freeze.

In response to rumors about a depeg of from the U.S. Dollar, the stablecoin issuer stated, “Tether tokens are 100% backed by our reserves, and the assets that are backing the reserves exceed the liabilities. Tether holds a strong, conservative, and liquid portfolio, which includes cash, cash equivalents and U.S. Treasuries. Tether will continue to focus on safeguarding those reserves as it has done for years.” 

The FTX exchange is struggling to raise about $9.4 billion from investors funding in an urgent quest to save itself as it is hit by user withdrawals, according to people familiar with the matter on Thursday. The week-long fiasco began with a run on the FTX exchange, one of the largest cryptocurrency exchanges, and the collapse of a takeover deal by main rival Binance. The storm has been met with a succession of investigations by relevant regulators, including the Bahamas Securities Commission and the U.S. Securities and Exchange Commission (SEC).

Sources close to the situation said that the founder and CEO of FTX, SBF, spoke with stablecoin platform Tether to raise $1 billion from Tether. However, Tether CTO Paolo Ardoino confirmed that Tether had no plans to invest or lend to FTX or Alameda Research. Paolo Ardoino also claimed that Tether has no exposure to FTX or Alameda.

Read more on the FTX-Binance crypto news:

Binance Backpedals On FTX Buyout Deal

Crypto Companies Scramble To Deny Ties To FTX And Alameda Research

Binance CEO Unveils Plans For FTX Acquisition

Binance CEO Confirms $529 Million FTX Token Dump


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