Shutdown ends access to XAUT collateral
Tether is winding down the Alloy platform’s recovery mechanism on September 17, 2024, preventing customers holding aUSDT from redeeming their XAUT gold collateral after that date. The company announced the closure on June 17, 2024, according to CryptoSlate Editor-in-Chief Liam ‘Akiba’ Wright.
Alloy is a platform built around dollar-tracking aUSDT debt backed by Tether Gold collateral, blending dollar stability with gold-backed security through Ethereum smart contracts. The platform operated as a collateral-mint system where holders had to extinguish the full outstanding aUSDT balance to remove all remaining XAUT.
Declining debt and collateral balances
As of June 30, 2024, Alloy had issued 907,994.8205 aUSDT with 470.4215 XAUT held as collateral. By August 10, 2024, open debt across five positions had fallen to 399,088.74 aUSDT, backed by 194.41497 XAUT, representing a 56% decline in aUSDT debt and a 58.7% decline in collateral over the five-week period.
The August 10 debt figure represents just 0.8% of the maximum total supply of 50,000,005 aUSDT shown in the token API and Etherscan. Alloy’s API displayed 209 holder addresses, though Etherscan showed only 80, and neither count maps directly to the five open positions.
Collateral status and recovery uncertainty
XAUT reflected in a position remains the customer’s but is pledged to Tether AbT and is not held as a segregated asset in the customer’s name. Collateral-mint-position holders must extinguish the full outstanding aUSDT balance to remove all remaining XAUT. Buying aUSDT on a secondary market does not confer rights to a specific position’s collateral.
Tether’s June 17 announcement and platform terms do not set out another operational recovery process after September 17. The company did not specify what happens to pledged XAUT after the shutdown or whether an alternative recovery mechanism will be offered. Tether also did not explain the reason for the platform closure or state whether position holders have been individually notified of the deadline.
Position holders who fail to settle their aUSDT debt before the recovery route closes will face an unresolved disposition of their collateral.
