SBF attempted to depeg the largest stablecoin by daily traded volume, Tether USDT, before filing for bankruptcy protection.
The latest details of FTX and Alameda’s pre-bankruptcy protection shows that Sam Bankman-Fried (SBF) allegedly attempted to depeg stablecoins. According to a WSJ report, SBF was confronted by other crypto executives from a Signal group chat called “Exchange coordination”. Reportedly, Changpeng Zhao, Binance CEO, confronted SBF on November 10, accusing him of attempting to depeg the stablecoins market.
“Stop trying to depeg stablecoins,” CZ noted in the Signal group chat.
According to aggregate data from Binance-backed CoinMarketCap, the stablecoins market valuation of approximately $142,925,239,438, with a 24-hour trading volume of about $27.57 billion. Hurting the stablecoins market could significantly destabilise the cryptocurrency, which heavily relies on top stable assets like Tether and USDC during high volatility.
“Stop doing anything. Stop now, don’t cause more damage,” CZ and Tether officials told SBF.
Reportedly, SBF attempted to depeg the largest stablecoin by daily traded volume, Tether USDT, before filing for bankruptcy protection.
Notably, Tether USDT has maintained its peg to the United States dollar for the most part since its inception. As of Monday, during early Asian trading sessions, USDT recorded a fully diluted market capitalization of approximately $73,147,482,832 with a 24-trading volume of about $20.9 billion.
Bigger Picture of SBF Actions on the Crypto Market
While prices of most digital assets led by Bitcoin remain significantly reduced compared to the end of last year, the crypto market has grown more resilient over time. Respective jurisdictions have enacted clear worldwide regulations on cryptocurrencies. Nonetheless, governments worldwide seek to review operation licenses for centralized crypto exchanges following the FTX implosion.
Furthermore, FTX and Alameda were key players in the industry and their demise has led to more related companies’ failure.
As such, market strategists argue the ongoing bear market may be longer than prior ones due to the macro aspects at play. Moreover, the cryptocurrency market has shown a significant correlation with the traditional stock market, specifically major global indexes.
While SBF continues to be investigated by different jurisdictions, around 1 million FTX customers have been left stranded. More so due to the $450 million bizarre hacking on FTX, which happened a few hours before SBF filed for bankruptcy protection.
Notably, non-custodial crypto wallets and decentralized exchanges alias DEXs have gained more traction in the past few weeks following the FTX collapse. Trading volume on major cryptocurrency exchanges has significantly slumped, with analysts expecting it not to rise soon.
Furthermore, Coinbase indicated in its recent quarterly earnings report that trading volume on digital assets is expected to remain down for the coming months. Hereby raising fears of a possible decline in the value on most digital assets.
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