Cryptocurrency enthusiasts and investors have been taken aback by the recent findings brought to light by Conor Grogan, a director at Coinbase. Grogan shared on social media that on-chain data uncovers the startling fact that Alameda Research, a prominent crypto investment firm, has minted a staggering 39.55 billion USDT tokens. This astonishing figure represents a significant 47% of the current circulating supply of Tether, the controversial stablecoin.
Grogan’s revelation contradicts a previous estimate by Protos, a well-known cryptocurrency news outlet, which had approximated the number of minted USDT tokens to be around $36.7 billion. However, Grogan emphasizes that his updated figures have taken into account additional wallets involved in the USDT minting process, providing a more accurate representation of Alameda Research’s contribution.
In addition to the shocking minting revelation, Grogan’s findings also shed light on the challenges associated with the redemption process for USDT. He highlights the intricate nature of determining redemptions, pointing out that Tether seems to coordinate off-chain burns. Unlike other cryptocurrencies with transparent deposit addresses, USDT redemptions involve direct transactions with Tether’s treasury, making it increasingly challenging to track accurately.
Grogan goes one step further and speculates on the possibility of other market makers being involved in USDT redemptions. He suggests that if all USDT redemptions from FTX, a prominent cryptocurrency exchange, were attributed to Alameda Research, they would account for a staggering 3.9 billion Tether. Interestingly, Grogan highlights a significant spike in USDT redemptions during two specific days in May 2022, coinciding with the Luna implosion event.
These groundbreaking revelations reinforce the findings presented in a 2021 report by Protos. The report asserts that market makers, specifically Alameda Research and Cumberland Global, played a pivotal role in introducing USDT into the cryptocurrency ecosystem. According to Protos, these market makers received at least $60.3 billion USDT, equivalent to a substantial 55% of all outbound volume.
Alameda Research, spearheaded by the renowned crypto billionaire Sam Bankman-Fried, is a multistage crypto and fintech investment firm. Founded in 2017, the company has quickly gained prominence in the crypto industry through its association with the FTX exchange and its active participation in numerous funding rounds and strategic investments.
Conor Grogan’s revelations have sent shockwaves throughout the cryptocurrency community. The minting of a significant proportion of USDT tokens by Alameda Research raises important questions about transparency and the integrity of the stablecoin ecosystem. As the controversy surrounding USDT continues to unfold, it is essential for regulators and market participants alike to closely scrutinize the practices of market makers and ensure the stability and credibility of the entire cryptocurrency industry.