Tether Yanks $1B In USDT Off Solana As Blockchain's FTX Ties Cloud Future
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Tether Yanks $1B In USDT Off Solana As Blockchain's FTX Ties Cloud Future

Created 1yr ago, last updated 1yr ago

Solana's biggest project, the decentralized exchange Serum, had to carry out an emergency hard fork for fears that private upgrade keys held by FTX were compromised.

Tether Yanks $1B In USDT Off Solana As Blockchain's FTX Ties Cloud Future

Tether has moved $1 billion worth of its USDT from Solana to Ethereum via a chain swap.

While it will show a token burn, the total amount of USDT — currently $65.9 billion — will not change, the company emphasized.

Solana's woes just keep coming in the wake of the collapse of the FTX exchange, which along with FTX's disgraced former CEO, Sam Bankman-Fried, was a strong and deeply involved supporter of the so-called "Ethereum killer" blockchain.

While virtually all cryptocurrencies have dropped steeply in the past year, Solana has been hit especially hard since FTX imploded.

Its market capitalization, which was as high as $15 billion as recently as July, now stands at $4.7 billion, and SOL is down two-thirds in the past 10 days — and 95% in the past year.

On Nov. 17, it was hit again, when three top exchanges — Binance, OKX and Bybit — abruptly stopped accepting the Solana versions of USDC and USDT without explanation. Binance soon reopened USDT (SOL), citing only "an internal assessment and review."

That is hardly the worst of Solana's problems.

One of the largest projects on the blockchain, the decentralized exchange Serum, had to undergo a hard fork when its developer — Jump — was forced to consider its private upgrade key compromised by FTX's bankruptcy, according to a tweet by Solana Labs co-founder Anatoly Yakovenko.

The problem is Bankman-Fried, several developers told CoinDesk. Specifically, that only FTX personnel had access to those keys, they said. After someone widely thought to be an insider made off with $477 million on Nov. 12, as the FTX Group's new management's move into bankruptcy proceedings were just beginning.

"The hack shows that someone malevolent has access to private keys at FTX," said one. "That would allow the hacker to rug [pull] the entire protocol. At this point things have gotten so crazy that anything is on the table."

FTX's collapse leaves Serum with questions about liquidity, as Bankman-Fried's companies provided a great deal of it.

More broadly, Solana has had several outages this year, but it is — now, perhaps, was — a leading competitor of Ethereum in attracting NFT projects due to the far lower costs of minting.

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