Samuel Bankman-Fried asked Tether for billions, the stablecoin turned FTX down

Samuel Bankman-Fried, the former CEO of bankrupt cryptocurrency exchange FTX reached out to Tether in its time of crisis. When the exchange platform was faced with insolvency, SBF reached out to stablecoin Tether to rescue it from the liquidity crisis. 

Paolo Ardoino, CTO of Tether shed light on how SBF approached him for billions in Tether during the November 2022 crisis. The executive has expressed interest in increasing transparency of his $66 billion collateral of Tether under circulation. 

Also read: Here’s what Bitcoin price needs to break out of the bear market in 2023

Samuel Bankman-Fried reached out to stablecoin Tether during FTX’s liquidity crisis

Samuel Bankman-Fried’s (SBF) FTX exchange collapse and subsequent bankruptcy of Alameda Research and related entities triggered the crisis that has plagued the crypto ecosystem since November 2022. When FTX exchange was faced with a liquidity crisis, SBF reached out to the largest stablecoin in the crypto market, to help tackle the impending insolvency. 

Paolo Ardoino, CTO of Tether told Forbes that the largest customer of the stablecoin, FTX, asked for billions, to rescue SBF’s crumbling crypto empire. Ardoino was quoted by Forbes:

He contacted us and asked for economic help. He didn't disclose details or exactly how much he needed, but we categorically refused. He suddenly asked for something that he had never asked for before, and he wasn’t talking about $10 million. The way he was talking suggested that he had a big issue. His request was in the billions.

For Tether, the demise of SBF’s crypto empire was bittersweet as the exchange platform was Tether’s largest customer. The $66 billion stablecoin has faced regulatory scrutiny throughout 2022 and expressed a desire to increase transparency on its collateral reserves. 

Tether has witnessed a rise in competitors vying for its spot of largest stablecoin in the crypto ecosystem. USD Coin (USDC) has a 29.8% share in stablecoin market capitalization and is preferred by Wall Street firms like BlackRock and BNY Mellon. 

Binance, the largest exchange by trade volume supports its stablecoin Binance USD (BUSD). Tether faces extensive competition from BUSD and USDC while executives prepare for increasing transparency in the stablecoin’s reserves.