Tether supports audit as FTX trial exposes links with failed Alameda

Tether CEO supports a stablecoin audit at a moment when the FTX trial raises questions about the minting of 36 billion USDT by bankrupt cryptocurrency trading firm Alameda Research. The crypto community is speculating about the source of the over $30 billion that was reportedly sent to Tether to allow the minting of billions in USDT, allegedly by Alameda Research.  

Tether CEO agrees to audit 

Tether CEO Paolo Ardoino said that the stablecoin issuer supports undergoing an audit process. Speaking to CNBC, Ardoino emphasized that the lack of such audits for stablecoins, including Tether (USDT), is not due to the unwillingness of issuers. 

"It is not because of the lack of willingness from stablecoins to do a full audit, but actually is the complexity and the fear from the top auditing firms to actually take the risk," Ardoino added.

Tether is the largest stablecoin, a crypto asset that is pegged to the price of the US dollar in an equal ratio. Therefore, Ardoino’s call for an audit could set a precedent for the industry. 

Statement by the Tether chief comes at a time when the ongoing trial of FTX's Sam Bankman-Fried has started a community discussion about missing USDT.

Coinbase director Conor Grogan contended earlier this month that there was a minting of 39 billion USDT tokens by bankrupt firm Alameda Research.

However, after reports alleged that only 4 billion USDT were redeemed, the crypto community is speculating about the source of funds behind a $32 billion discrepancy, with some suggesting FTX's involvement as a "bank mule" for other actors. 

FTX trial pushes community questions about USDT minting 

Dylan LeClair, a crypto market researcher, noted that the amount of USD wired for minting USDT tokens hasn't been discussed in the trial of Sam Bankman-Fried.

"So, is the story that someone else wired the money? Or (?)," he said.

LeClair also questioned the peculiar undervaluation of USDT compared to other stablecoins on the FTX platform. 

Meanwhile, the ongoing trial recently saw a forensic expert, Peter Easton, shed light on how $9 billion in FTX customer funds were used in June 2022, months prior to FTX's bankruptcy. 

Bloomberg quoted Easton revealing that $11.3 billion in customer funds meant to be held at Alameda Research only amounted to $2.3 billion in bank accounts. The report finds that the funds were subsequently utilized for various purposes, including investments at firms like SkyBridge Capital and Modulo Capital, along with political contributions, charity foundations, and real estate purchases.

The ongoing trial and information surrounding Tether, Alameda Research, and FTX will continue to unfold the story of how funds were used in the bankrupt firms. However, a stablecoin audit as a standard could help streamline the industry.