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Stablecoin powerhouse Tether has announced a major cross-chain transfer, moving over $2 billion in USDT from various blockchains to the Ethereum network. The transfer, carried out on behalf of a major but undisclosed exchange, involves transferring 1 billion USDT from Tron, 600 million from Avalanche, 300 million from NEAR, and 60 million from EOS, all rerouted to Ethereum.
Transfer Amid AML Violation Allegations
Tether assured the public that the transaction won’t impact the overall USDT supply, noting that the swap is a routine move to accommodate its partner’s need to consolidate assets on the Ethereum blockchain.
This announcement comes at a sensitive time for Tether, as recent news suggests that the U.S. government may be probing the company over allegations related to money laundering and sanctions compliance.
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Although Tether has not confirmed or denied the specifics, the mere mention of such an investigation triggered unease in the market. The uncertainty stirred by these reports led to minor volatility across crypto assets, as investors reacted to potential risks surrounding the world’s most widely traded stablecoin.
Tether’s Reserve Breakdown to Reassure Investors
In response to the speculation, Tether’s CEO Paolo Ardoino took to the stage at the PlanB forum in Lugano, Switzerland, presenting a detailed breakdown of the assets backing Tether’s USDT.
Ardoino underscored that Tether’s reserves include $100 billion in U.S. Treasury bills, around 82,000 Bitcoin valued at approximately $6.2 billion, and 48 tons of gold, which has recently appreciated to a record-high value of $2,790 per ounce. The reserve transparency was intended to reinforce Tether’s position as a well-backed stablecoin amidst the growing scrutiny.
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Despite the recent headlines, Tether’s USDT has achieved a market capitalization of $120 billion in October. This high market cap is often interpreted as an indicator of robust trading activity and market confidence in the stablecoin sector, especially as USDT has become a preferred currency substitute in markets facing inflationary pressures.
According to recent data from Chainalysis, stablecoins like USDT are increasingly being used as a store of value in countries grappling with rapid currency devaluation, as opposed to solely fueling speculative trading.
