Tether issued a brief statement on Nov. 16 saying it has no exposure to institutional cryptocurrency lender Genesis Global or the Gemini Earn program following the announcement that Genesis Global and the Gemini exchange were freezing withdrawals. Genesis Global is the lending partner of the Gemini Earn program, which earns interest.
Eager to differentiate itself from cryptocurrency organizations affected by the FTX contagion, Tether said:
“It is important at a time like this to note that these Tether reserves have proven to be tried and true by demonstrating consistent resilience during the black swan events that have characterized the market this past year.”
Tether, operator of USDT, the largest stablecoin and the third digital currency by market capitalization, lost its peg to the US dollar for a brief period on May 12, at the beginning of the cryptocurrency market collapse.
Tether said the Nov. 16 announcement was “part of Tether’s ongoing efforts to increase transparency.” Tether has resisted efforts to make it prove support for its stablecoin, losing in February a case brought by the New York Attorney General’s Office in 2019 to expose that information. In July, Tether hired BDO Italia to conduct monthly audits and audits of its reserves to make them public as part of the settlement of that case.
Tether Confirms Zero Exposure To Genesishttps://t.co/KHEx2HWoJ1
— Tether (@Tether_to) November 16, 2022
The stablecoin has made quite public its reduction of commercial paper in its reserves to zero throughout the year.
Genesis Global announced in a tweet on November 16 that it was temporarily suspending redemptions and new loans due to the “market turmoil” derived from the collapse of FTX. Following Genesis Global’s announcement, Gemini said it would be unable to service customer refunds for five days.
The collapse of the FTX exchange has sent new waves of angst through the cryptocurrency markets that may continue to be felt for months to come.
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