Tether has indicated that it has no plans to invest cash into FTX, despite the CEO allegedly approaching many companies for assistance.
As it struggles to close a reported multi-billion dollar hole in its balance sheet, cryptocurrency exchange FTX has lost at least one potential rescuer.On November 10, Paolo Ardoino, the chief technology officer of stablecoin issuer Tether, confirmed the business has “no plans to invest or lend money to FTX/Alameda.”
Ardoino made his remarks in response to a Reuters report from Nov. 10 that claimed the $9.4 billion shortfall at FTX had FTX CEO Sam Bankman-Fried reaching out to several businesses for funding to keep the exchange afloat.
Tether, the cryptocurrency exchange OKX, and the venture capital firm Sequoia Capital are among the businesses that Bankman-Fried is said to have approached for funding. It is said that he has requested at least $1 billion from each of the companies.
The chief technical officer of Tether’s reaction seems to support the sentiment expressed in a blog post published on November 9 in which Tether assured the community that it had no connection to Alameda or FTX.46,360,701 Tether USDT ($1.00) have reportedly been frozen by the stablecoin’s issuer owned by FTX on Nov. 10 in its Tron blockchain wallet to abide by law enforcement.
It is unclear at this time whether OKX or Sequoia Capital are thinking about supporting the troubled exchange. Lennix Lai, OKX’s director of financial markets, previously told Reuters on November 9 that Bankman-Fried requested up to $4 billion from the exchange to help cover FTX’s liquidity issues, but she did not say whether the company would help FTX.
On Nov. 10, Sequoia zeroed out its nearly $214 million worth of investments in FTX and declared them a complete loss, claiming that the company’s liquidity problems “created a solvency risk” but that the impact would be minimal.
According to two unnamed sources, FTX reportedly also approached the cryptocurrency exchange Kraken, as reported by Axios on Nov. 10; however, it is unclear whether a deal was ultimately reached between the two parties.
Through a deal with the Tron blockchain that permits its assets to be swapped 1:1 with external wallets, FTX currently only seems to be able to continue a small number of withdrawals. As users rushed to leave the exchange as a result of the agreement, Tron-based tokens traded at a premium of up to 1200% on the platform.
