Tether has frozen a USDT address associated with the embattled crypto exchange FTX holding $46 million worth of Tether USD tokens. According to Tronscan, a Tron block explorer, FTX’s wallet was frozen following a law enforcement request. As such, the company behind the world’s largest dollar-pegged stablecoin has complied with the request, which could be connected to an investigation into the FTX crypto exchange’s operations.
FTX, which was until Tuesday the world’s second largest crypto exchange in the world, halted withdrawals earlier this week as the exchange faces major liquidations of its native FTX token, FTT. The exchange is now on the brink of collapse after an alleged feud with rival exchange and blockchain Binance. Changpeng Zhao, alias CZ and the CEO of Binance, announced the company’s decision to liquidate all of its FTT holdings, citing “recent revelations that have come to light, according to a tweet on November 6.
What followed was immense selling pressure that has rocked the entire crypto market with prices of digital currencies plummeting across the board. As a result, more than $150 billion have been wiped off the crypto market in less than 48 hours.
FTT holders have been dumping the token not only on its mother platform FTX, but also on all other crypto exchanges across the world in an attempt to minimize losses as its value decreases. At the time of writing, FTT was trading at $4, 83% below its value at $26 just a few days ago.
Following the fiasco, Binance offered to acquire the sruggling rival exchange FTX after a Letter of Intent (LoI) was signed between the former’s CEO Zhao and FTX’s CEO Sam Bankman-Fried (SBF) on Wednesday, November 9. This was short lived as market participants woke to the news that Binace had backed out of the deal on Thursday citing “ issues [that] are beyond our control or ability to help.”
The Binance statement also said that news reports on “allegations of US agency investigations” have influenced the decision not to proceed with the acquisition of FTX.com as had been earlier announced.
FTX Under Investigation
There is no doubt that the recent events would lead to regulators around the world opening inevstigations into the operations of SBF’s company. At the moment, there are little details on the purpose and nature of investigations. Initially there were reports of the U.S. Securities Exchange Comission (SEC) closely following Binance’s acquisition of the embattled crypto exchange. This has been cited as one of the reasons why the largest crypto exchange decided not to go ahead with the acquisition plans.
Remarking on the move to freeze FTX’s USDT address, aTether executive told CoinDesk that the company had begun receiving “requests from LE to temporarily freeze assets while an investigation occur.” LE is an acronym for law enforcement.
USDT depegged from is dollar peg trading 3% below $1 earlier Thursday as wordon FTX’s plight spead across the market. At press time, USDT trading at $0.9999, according to data from CoinMarketCap.