More than 10 million Paxos Standard stablecoins were minted in the 18 hours after the New York Attorney General’s bombshell allegations about rival issuer Tether.

Chad Cascarilla, CEO of Paxos, which issues the Paxos Standard token, said the company saw a surge in demand overnight.

“There was a lot of minting that happened yesterday throughout the day and overnight as well,” Cascarilla told CoinDesk Friday morning. “I think that’s definitely a function of the news because PAX started trading at a very significant premium to Tether and the dollar.”

He attributed this behavior to increased demand for his firm’s stablecoin, adding:

“We don’t pre-mint PAX, so the PAX [volume] is going up or down based on market demand for Paxos dollars … so that increase is definitely related to market demand and I have to assume it’s because of the Tether news.”

Specifically, 13,737,199.87 new PAX were created and 3,354,741.74 were redeemed, for a net increase of 10 million, according to blockchain data. Most of the new issuance (13,158,288.4) was minted after the Tether news came out around 17:00 UTC, in these four transactions.

Another regulated stablecoin, USD Coin issued by the Centre consortium of Circle and Coinbase, also saw a surge in demand after the news came out, with 8,276,917.27 new tokens minted (1,2,3,4,5,6,7).

The NYAG claimed Thursday that crypto exchange Bitfinex had lost $850 million in customer and corporate funds to a payment processor, and was making up the shortfall by borrowing reserves from Tether, the company behind a dollar-pegged stablecoin of the same name (also known as USDT).

Doubts rekindled

Tether has long claimed that each of its nearly 3 billion circulating tokens are backed 1-to-1 by U.S. dollars. But Thursday’s news rekindled long-simmering questions about whether Tether indeed has nearly $3 billion in holdings.

Traders seem to be fleeing to other stablecoins in light of the allegations.

Indeed, according to TokenAnalyst.io, stablecoins not named tether have seen massive volume increases over the past 24 hours, with the majority trading at a premium as well.

USDCoin, the Gemini dollar, TrueUSD, DAI and Pax have all seen their prices climb above the dollar as Tether fell to $0.99.

“The recent revelations regarding [Bitfinex parent] iFinex and Crypto Capital [the payment processor that allegedly lost Bitfinex’s funds] raise questions about the reserves purported to be backing USDT,” said Jesse Proudman, CEO of Strix Leviathan, a trading tech firm.

As a result, he said:

“We would expect that this action will cause capital to migrate from Tether to regulated and fiat-backed stable coins like USDS, USDC, TUSD and PAX.”

Chad Cascarilla image via CoinDesk archives

Anna Baydakova contributed reporting