Crypto mega-billionaire Sam Bankman-Fried says he's bought billions of tethers in order to trade other coins

·2 min read
Sam Bankman-Fried FTX founder crypto exchange
Sam Bankman-Fried co-founded the crypto exchange FTX in 2019. FTX
  • FTX CEO Sam Bankman-Fried revealed in a recent Bloomberg report that he has bought billions of tether.

  • "If you're a crypto company, banks are nervous to work with you," he said.

  • Other crypto traders who spoke with Bloomberg described using tether as an intermediary currency as effectively an industry standard.

FTX CEO Sam Bankman-Fried recently revealed that he has bought billions of tethers to help along trading in other cryptocurrencies, according to a feature piece on the stablecoin in Bloomberg Businessweek.

Interviewed at a sold-out bitcoin conference in Miami in June, Bankman-Fried told Bloomberg that transacting with tether, the largest of the dollar-pegged stablecoins, had one key advantage over using dollars.

"If you're a crypto company, banks are nervous to work with you," he said.

Tether's biggest advantage for crypto exchanges, as Bankman-Fried hinted at, is its ease of use. Instead of converting crypto to dollars - which might raise hackles at banks wary of facilitating money laundering - holding a stablecoin like tether in principle preserves the same value while making it easier to delve back into crypto.

Other crypto traders who spoke with Bloomberg described using tether as an intermediary currency as effectively an industry standard, despite deep reservations about whether the stablecoin is really backed by dollars. Some of these tether users even harbored conspiracy theories: it's a CIA backchannel for dirty money, or a government scheme to track criminals.

As scrutiny of tether has escalated, with the DOJ pursuing a bank fraud probe against tether execs for past behavior, Bankman-Fried has stood by listing tether on FTX. In August, he said that his exchange would not treat the stablecoin any differently.

"Tether is a cryptocurrency that can be on FTX, like any other cryptocurrency," he told CNBC. "It's not treated as exactly a dollar on FTX. It's a free-floating crypto."

"It's not crucially part of our USD basket, which means the exchange doesn't treat it as necessarily one-to-one with US dollars. That's for the market and users to determine," Bankman-Fried said.

Following that CNBC interview, the 29-year-old crypto billionaire expressed some frustration with the media's focus on tether's legal woes.

"Eh only 20% of the interview was about USDT, I'll take that as a win," he tweeted.

Read the original article on Business Insider

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