Tether: There Is No Risk Inherent to Solana $USDT

$USDT issuer Tether said that while Alameda was one of the larger issuers of $USDT, the failure of Alameda did not represent a risk to Tether. Tether explained that $USDT is issued when institutional parties send USD to Tether and Tether issues $USDT on a 1:1 basis corresponding to the amount of USD sent to Tether. Tether then converts this USD into reliable, liquidity and conservative collateral (US Treasuries, etc).

Alameda issued $USDT, which meant that they sent Tether USD, and Tether issues $USDT. Those reserves are still in Tether's possession; they are not on Alameda's balance sheet. The collateral backing Alameda's $USDT is not on Alameda's balance sheet.

In addition, Tether didn't lend Alameda any $USDT or other funds and didn't engage in any leverage activity, leverage trading or collateralized borrowing against Tether's reserves.

There is no risk inherent to Solana $USDT. $USDT on Solana is equivalent to $USDT on any other Blockchain, it is not issued by Solana and is not reserved by Alameda or FTX. Alameda's heavy involvement in Solana doesn't impact the underlying dynamics of how $USDT functions and $USDT issuance works whatsoever.

Tether said that the move to suspend $USDT deposits on these exchanges is likely just due to the heavy connections between FTX, Alameda, and Solana.