Tether, the company that is responsible for issuing the USDT stablecoin, has disclosed that the recent failure of the FTX exchange and its Alameda Research hedge fund does not have a detrimental effect on the ecosystem that it operates in.

According to the most recent article on Tether's blog, the issuance policy of the firm shields it from the consequences of Alameda's failure. One of the most prominent issuers of the USDT stablecoin is the company known as Alameda Research.

Tether outlined the process by which its USDT stablecoins are created, stating that this happens whenever an institutional party sends USD to Tether. The quantity of US dollars that are remitted to Tether is directly proportional to the number of Tether dollars that are issued by the corporation.

Tether further mentioned that it transforms US Dollars into collateral that is dependable, liquid, and prudent ( US Treasuries, etc.). This means that all USDT stablecoins are completely collateralized by Tether's reserves, and that each USDT may be redeemed for the same amount of US dollars that it was originally purchased for.

Alameda Research, a significant contributor to the USDT supply, provided Tether with USD, and Tether in turn created new USDT. The United States Dollars that belong to Alameda Research are still in the control of Tether, but they are not included on Alameda's balance sheet. According to Tether, the collateral that supports Alameda's USDT is not shown on the company's financial sheet.

Tether has made it known that Alameda may still use its redemption tool to turn any USDT they possess into USD, as the company disclosed. The firm went on to say that it does not have any outstanding loans of Tether reserves, USDT, or any other type of cash of any kind. That was written by Tether;

"The primary issue that a great number of other businesses are currently dealing with is that they irresponsibly lent Alameda a variety of assets and relied on extremely illiquid collateral." These businesses have a gap in their balance sheets as a result of the fact that Alameda is unable to repay those loans at this time. This is not how the issuance of USD takes place, and Tether did not engage in any kind of behavior like this with Alameda in any way.

Additionally, Tether elucidated its approach to the lending process. The issuer of the stablecoin stated that the only time it participates in lending is when the transaction is based on an excessive collateralization with extremely liquid assets.

During the past few months, several cryptocurrency lenders, such as Voyager Digital and Celsius, have been experiencing difficulties. As a result of the bankruptcy proceeding being initiated by FTX, Binance US is preparing a new offer to acquire Voyager Digital.

Tether has made it clear that it thinks the approach taken by many lenders in this industry has been irresponsible. These lenders have been lending enormous amounts of money and accepting pinky swears and FTT as collateral along with other illiquid assets. Tether has pointed this out.

Tether has stated that there has been no interference with its business operations despite the difficulties experienced by other companies such as Alameda Research and Celsius.