Concerns have arisen regarding Ethena Labs' USDe, particularly about the exposure of approximately $1.2 billion in funds to the cryptocurrency exchange Bybit.
However, Ethena Labs has clarified that they do not keep any collateral on Bybit. Instead, all assets backing USDe are held in off-exchange custody solutions, specifically with Copper Clearloop.
Ethena also reported that there is currently less than $30 million in aggregate unrealized profit and loss related to Bybit. This situation has prompted discussions about the potential risks of exchange insolvency, highlighting the importance of their custodial arrangements.
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