It has not been a long time since two major cryptocurrency entities ended up facing a major liquidity crisis.
These entities include Alameda Research, the trading firm, and FTX, the crypto exchange founded and run by Sam Bankman-Fried.
However, as these entities have suffered from major liquidity crises, the cryptocurrency communities are questioning their crypto firms of having any exposure in FTX or Alameda.
Three Major Entities Clear Out the Concerns
According to the reports, right after the Alameda Research and FTX liquidity crisis, the Coinbase, Circle, and Tether communities went after their developers.
They started asking questions if these major entities had any exposure to FTX or Alameda Research. If that were the case, then these firms could end up facing a similar impact as Three Arrows Capital and more.
Three Arrows Capital (3AC) had invested heavily in the Terra Network. Just as the TerraUSD (UST) crashed, its exposure was badly impacted and the firm had to file for bankruptcy.
The Celsius Network followed the same trend as 3AC, as it had also invested in UST and it also ended up filing for bankruptcy.
Now, both firms are dealing with bankruptcy sessions leaving thousands of investors with huge losses.
Fearing the same, the communities at Coinbase, Circle, and Tether have demanded clarity and transparency. They want to know if their firms are at any risk of liquidating or going bankrupt.
The executives from all three major entities have given assurances to the investors that they had no exposure to FTX or its trading platform at all.
Executives have Provided Clarity
At first, it was Brian Armstrong, the Coinbase exchange’s CEO who confirmed that they had no exposure to FTT or FTX whatsoever.
He clarified to the users had nothing to be worried about as the exchange is facing no financial risks from the troubled firms. Armstrong did criticize both firms for doing what they did in the interest of the users.
Jeremy Allaire, the CEO at Circle, also cleared out the confusion and fear among their community. He clarified that the rumors of their firm having exposure to FTT or FTX is completely wrong.
Their firm has no material exposure to either of the firms and he also clarified they have no pending loans or collaterals with these firms even when they collaborated with them.
Paolo Ardoino, the CTO at Tether also provided clarity on the matter confirming the company has no exposure at all.
The CTO did mention that in the past, many Tethers had been redeemed through Alameda Research but there is no pending credit with the firm now.