Research: These two firms dominate the entire Tether (USDT) flow

  • The number of USDT stablecoin that Tether released in the market has jumped by 72x in the last four years.
  • A majority of the issuance happened over the last two years dominated by Alameda Research and Cumberland Global.

As the cryptocurrency market continues to expand, stablecoin Tether (USDT) has made a special place for itself. It has been one of the industry’s go-to digital assets to form a bridge between fiat currencies like the USD and decentralized digital assets.

Protos, an independent crypto outlet has done in-depth research into Tether along with other liquidity providers who supply this stablecoin to other crypto exchanges. Over the last four years, Tether’s USDT market cap has shot up from about $1 billion to over $73 billion as of date.

However, there’s always been some suspicion regarding who is buying so much Tether from its parent company Bitfinex. As per the research by Protos, only two companies – Alameda Research and Cumberland Global – accounts for two-thirds of all USDT in the crypto ecosystem. The research report reads:

Together, Alameda and Cumberland received at least $60.3 billion in USDT across the time period analyzed, equal to around 55% of all outbound volume — ever. $49.2 billion (71%) of Alameda and Cumberland’s USDT was acquired in the past year alone, equal to about 60% of all Tether issued in that time.

As per the Protos research, Alamada Research led by FTX exchange founder Sam Bankman-Fried acquired a total of $36.7 billion USDT and a third of all Tether produced. Interestingly, of this total value received by Alameda Research, 86% or $31 billion came just over the last year. This is an equivalent of 37 percent of the total outbound USDT volume.

Cumberland, which is also the world’s largest liquidity provider comes second receiving $23.7 billion. Cumberland, a subsidiary of DRW Holdings is one of the world’s biggest financial traders.

The Outflow of USDT From Tether’s Treasury

As per the report, Tether has sent more than $30.1 billion (87%) of Alameda’s USDT to its crypto and derivatives exchange FTX. But Alameda Research also has wallets on a variety of different crypto exchanges. As a result, the company received $2.1 billion worth USDT on Binance, another $1.7 billion on Huobi, and $115 million on OKEx. The rest of $705 million went to non-exchange addresses.

On the other hand, Cumberland received a total of $23.7 billion in USDT. Over the last year itself, Cumberland received $17.6 billion in USDT from the Tether’s Treasury. This accounts for 22 percent of all the outbound USDT volume ever recorded.

Besides, Protos further explains Cumberland’s importance as a market maker and liquidity provider for crypto exchange Binance. The liquidity provider has been on the exchange since early 2019. Since then, Tether has issued Cumberland $18.7 billion (79 percent) in USDT to Binance. The rest went to other exchange platforms.

Tether is still the world’s largest stablecoin crypto by market. However, the company has been under major scrutiny by regulators. There have been allegations that Tether doesn’t have enough physical USD backing the number of USDT in the market.

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