How and why is Tether linked to the FTX crisis?

Several cryptocurrencies have had to bare the brunt of FTX’s collapse.

Questions were raised on whether Tether, the largest stablecoin by market cap, would survive the ongoing market turmoil.

Popular YouTuber and social media user @Coffeezilla, raised some concerns regarding Tether’s connection to the FTX crisis.

He pointed out that Alameda Research, the sister company of the under-fire FTX exchange, was reportedly the largest on-market user of Tether (USDT).

Several users gasped at the sheer balance of USDT on Alameda’s books (worth $36.6 Billion) and questioned what would happen next.

Tether Issues Clarification

Amid the hubbub, Tether attempted to distance itself from the FTX collapse altogether.

Alameda was one of the larger issuers of USD₮, and due to this there has been ample discussion of whether the failure of Alameda represents a risk to Tether. The short answer is no”