According to recent reports, Sam Bankman Fried’s Alameda Research is trying to short the USDT stablecoin in order to recoup a portion of its debts. Per Wu blockchain, Tether supposedly processed 700 million redemptions in the past 24 hours, resulting in a higher premium on the USDT price.
Hasaka, a well-known crypto researcher, was the first to notice this pattern, noting that Alameda Research appears to be shorting USDT by supplying USDC stablecoin on the AAVE platform to borrow USDT. The platform has also swapped USDT to USDC on curve finance, with the transaction being recorded on Etherscan.
In the meantime, USDT has also depegged from the $1 mark. Furthermore, a large volume of USDT was purchased, resulting in a shortage that drove the price significantly higher. In contrast, bears have given up on the market, and selling volume has increased recently.
Amidst this, TRON DAO has bought $1 billion in USDT tokens as the stablecoin started losing its peg.
Justin Sun, TRON’s inventor and crypto millionaire is reportedly devising a plan to salvage Sam Bankman-FTX Fried’s exchange after Binance backed out of the acquisition. It is unknown whether the acquisition would include Alameda, which, together with Cumberland Global, is said to have acquired almost two-thirds of all USDT currently in circulation.
Considering the similarities between the current scenario and the one that transpired during the Terra crash, market observers have assumed that Alameda Research is trying to short USDT.
Circle Under Fire
Previously, Circle and Tether, the companies behind stablecoins USDC and USDT dissociated themselves from crypto exchange FTX and trading firm Alameda Research as the crypto industry grapples with the aftermath of FTX’s demise.
Meanwhile, Tether has frozen FTX’s $46 million in USDT stored on the Tron blockchain. According to Tronscan, the wallet was identified as belonging to FTX.
“We are starting to receive requests from LE [Law Enforcement] to temporarily freeze assets while an investigation occurs,” a Tether executive was quoted saying in the report.
