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Tether Denies Claims of Asian Commercial Paper Backing, Exposure to Three Arrows Capital
Tether described certain rumors spreading to this effect as "completely false and likely spread to induce further panic."
Updated May 11, 2023, 5:41 p.m. Published Jun 15, 2022, 8:32 a.m.
Stablecoin issuer Tether has denied claims that its commercial paper portfolio is 85% backed by Chinese or Asian commercial paper.
- Tether described certain rumors spreading to this effect as "completely false and likely spread to induce further panic in order to generate additional profits from an already stressed market," in an announcement Wednesday.
- The issuer of USDT, the world's most widely used stablecoin, added that Celsius' position has been liquidated following the crypto lender's freezing of account withdrawals Monday in response to the sharp downturn across the cryptocurrency market.
- An investigation last year found that Tether had loaned $1 billion to Celsius, using bitcoin as collateral.
- Tether also denied rumors that it has lending exposure to Three Arrows Capital, the crypto hedge fund that was one of the biggest investors in the Terra blockchain. The fund now faces possible insolvency after incurring $400 million in liquidations, according to a report.
- The composition of USDT's reserves has long since been an area of concern in the crypto market, with questions specifically surrounding the nebulous "commercial paper." In its latest attestation of its deposits as of the end of March, Tether reported that $20.1 billion of its holdings were in commercial paper, down from $30.8 billion in June last year.
- Tether's chief technology officer added via Twitter that this figure would be reduced further to $8.4 billion by the end of this month.
Read more: Nexo Proposes Celsius Buyout as Rival Lending Platform Halts Withdrawals
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