Despite the CEO reportedly reaching out to multiple firms for assistance, Tether has confirmed that it will not provide a cash injection to FTX.
FTX, the cryptocurrency exchange, has lost at least one potential rescuer as it struggles to fill a reported multi-billion dollar hole in its balance sheet.
Paolo Ardoino, Tether’s chief technology officer, confirmed on November 10 that the company has “no plans to invest in or lend money to FTX/Alameda.”
Ardoino’s comments came after Reuters reported on November 10 that FTX is now facing a $9.4 billion shortfall, with FTX CEO Sam Bankman-Fried reaching out to a variety of companies in search of cash to keep the exchange running.
Tether, cryptocurrency exchange OKX, and venture capital firm Sequoia Capital, according to the report, are among the companies Bankman-Fried has approached for funding, with each reportedly asking for $1 billion or more.
Tether’s chief technology officer’s response appears to be consistent with the company’s November 9 blog post, in which it assured the community that it has no exposure to Alameda or FTX.
To comply with law enforcement, the stablecoin issuer was also reported to have frozen 46,360,701 Tether USDT owned by FTX in its Tron blockchain wallet on November 10.
It is unknown whether OKX or Sequoia Capital are considering investing in the troubled exchange.
However, Lennix Lai, OKX’s director of financial markets, previously told Reuters on November 9 that SBF had requested up to $4 billion from the exchange to help cover FTX liquidity issues, but did not confirm whether the company would assist FTX.
Meanwhile, Sequoia declared a complete loss on its nearly $214 million investment in FTX on November 10, citing liquidity issues that “created a solvency risk” but adding that the impact would be minimal.