Report: Tether freezes $46M of FTX’s USDT, setting new precedent

According to blockchain transaction data provided by WhaleAlert on Nov. 10, Tether appears to have frozen 46,360,701 USDT (USDT) ($46,274,472) owned by troubled cryptocurrency exchange FTX in its Tron blockchain wallet. The move comes one day after the United States Securities and Exchange Commission and the U.S. Justice Department began investigating FTX over its liquidity crisis. 

A spokesperson from Tether stated on Oct. 11 that the firm only freezes privately held wallets when it firm receives a legitimate request from a verified law enforcement agent to do so and that “we do not freeze wallets of exchanges or services.” If confirmed, the freeze imposed against FTX’s wallet would be the first of its kind. The same day, Japanese authorities ordered FTX to halt operations in the country after the exchange halted withdrawals.

Update (Nov. 10, 3:45 pm UTC): A Tether spokesperson to whom Cointelegraph reached out stated: “While we cannot specifically comment, Tether routinely has an open dialogue with law enforcement agencies, including the U.S. Department of Justice, as part of our commitment to cooperation, transparency and accountability.”

“Amid rumors 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.”

In response to multiple unconfirmed rumors that Tether held USDT exposure to the ailing exchange, the spokesperson reiterated that Tether has no credit toward FTX nor its affiliate trading firm, Alameda Research. “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,” the source said, adding: “Tether will continue to focus on safeguarding those reserves.”

This is a developing story, and further information will be added as it becomes available.

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