Tether cutoff puts $50M of Alloy-backed gold at risk

Tether will close the Alloy recovery route on Sept. 17. Five open collateral-mint positions hold 399,088.74 aUSDT of outstanding debt and 194.41497 XAUT of pledged gold, a quantity of metal worth roughly $50 million. Tether has not published an operational process for customers to reclaim pledged XAUT after the cutoff.

Alloy issues dollar-tracking aUSDT tokens that are backed by Tether Gold (XAUT) posted as collateral. Under the platform’s terms, a holder must extinguish the full outstanding aUSDT balance tied to a specific collateral-mint position to withdraw the associated XAUT. A 25-basis-point fee applies on returns. Buying aUSDT on secondary markets does not confer rights to collateral held in a specific position.

Alloy’s contract and vault data show a maximum aUSDT supply of 50,000,005 tokens, but that headline supply does not equal obligations tied to collateral positions. Product documentation and the vault API distinguish unissued tokens that may sit idle in the contract from debt linked to active positions. The current open debt of 399,088.74 aUSDT equals less than 0.8% of the contract’s maximum supply.

The outstanding exposure has fallen since the June 30 snapshot. At that time Alloy reported 907,994.8205 aUSDT issued and 470.4215 XAUT posted as collateral. The current figures represent a 56% decline in open debt and a 58.7% decline in pledged XAUT compared with June 30.

Address counts vary across reporting sources: Alloy’s API lists 209 holder addresses while on-chain explorer data show 80 addresses. Neither address count maps directly to the five open positions, since a single customer can control multiple whitelisted addresses.

Alloy’s terms, last updated in 2024, state that XAUT recorded 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. The terms do not specify how pledged XAUT will be handled after the recovery route closes on Sept. 17.

Balances can still change before the cutoff if position holders return aUSDT and reclaim XAUT. As of now, there is no published reclamation route or operational guidance that would apply to the remaining positions after Sept. 17.