USDT-on-TRON, FTX & WTF Is Really Happening

  1. There is a big ole pile of USD at US banks that bank crypto that matches USDT issuance quite well.
  2. All the major players bank there.
  3. The minor stablecoins look more like funnels for dollars into USDT than mediums of exchange or stores of value.
  4. Those minor stables look like they are feeding USDT-on-TRON in particular.
  5. A few well-known players are closely linked, via on-chain data, to mint-transfer-burn cycles of this process that run into the billions of dollars.

Plan of Attack

The analysis here is pretty simple. We are going to work through the mechanics of two Chinese USD payment networks and show how they differ from those we previous discussed with quantitative evidence. Then we are going to prove, with on-chain data, that those networks are effectively backed by a single well-known party. And finally we conclude by bringing together a lot of these facts and presenting the beginnings of a clean, scientific, end-to-end theory.


These two chains are affiliated with Justin Sun and Huobi respectively. From even a casual look at the websites and social media it is clear they target Chinese, and East Asian more broadly, markets. Go browse the sites a bit — Chinese pops up all the time. There is also a lot of relevant news about them expanding in the region.


When Protos ran their “Tether Papers” piece they missed some fascinating information. During the period of massive growth in USDT outstanding there was essentially only one party receiving it on TRON:

FTX/Alameda received all the USDT-on-TRON.
Binance in this case is Binance/Cumberland per Protos’ reporting.


Let’s revisit this post with a narrower focus on on-chain data:

What’s Going On?

We now know:

  1. These two parties are receiving the vast majority of new USDT. (this post, also Protos but with less specificity)
  2. The amount of USDT matches the cash balances at their banks. (prior post)
  3. We see them on-chain redeeming minor stablecoins for USD, plausibly — in some cases definitely — at those banks. (prior post)
  4. The two largest players share at least some redemption wallets. They are coordinated to some non-zero degree. (prior post)
  5. The two largest players each dominate separate chains and do not directly compete in the USDT arena. (this post)
  1. USDT is used in the real world for all kinds of “grey area” stuff. This video again.
  2. Crypto is formally illegal in China. Including stablecoins.
  3. USD are generally inaccessible, or heavily restricted, in China.
  4. TRON, and Huobi Eco Chain, are big in stablecoin transactions in China and adjacent/similar places. (this post, news, or browse the explorers if you must).

Why The Split?

We know there are, or were, other ways to get cash into the crypto economy. For example straight-up bank transfers:

Old FTX on-ramp instructions.
Old Kraken on-ramp instructions (or transactions).

Theory Coming Info View

A Note On Binance/Cumberland

We are not asserting anything about the relationship between these two entities that is not already broadly reported in the open. This theory works under every scenario from “Cumberland is an arms-length market maker for the USD-USDT pair on Binance” to “Cumberland and Binance share on-chain liqudity.” So long as something vaguely similar to the Protos reporting is correct this theory matches the facts. We have more information (natch) but it is not necessary at this time.



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