According to its CTO, The company behind Tether (USDT), the world’s largest stablecoin by market capitalization, has never received any loans from bankrupt cryptocurrency lender Celsius.
Paolo Ardoino, the CTO of Tether and cryptocurrency exchange Bitfinex, took to Twitter on Jan. 31 to announce that Tether has “never borrowed from Celsius.”
The tweet came in response to the Celsius bankruptcy examiner’s report, which allegedly wrongly implied that Tether was among Celsius’s borrowers alongside companies like Three Arrows Capital, which borrowed $75 million from the company.
Published on Jan. 31, the examiner’s report mentioned on page 183 that “Celsius loans to Tether doubled their credit limit.”
The report notes that “Tether’s exposure eventually grew to over $2 billion,” which became an issue in late September 2021, when it was described to the risk committee as presenting “existential risk” to Celsius.
Denying any exposure to troubled Celsius, Ardoino suggested that examiner Shoba Pillay mistook prepositions in the examiner’s report, actually meaning “Celsius loans from Tether” rather than “Celsius loans to Tether.”
“It’s either a typo or a mischaracterization,” Tether’s CTO wrote in a Twitter thread started by Financial Times journalist Kadhim Shubber.
Shubber too mentioned that the examiner’s report is associated with a certain level of misunderstanding, stating:
“The above examiner’s report describes Celsius as having ‘loans’ to Tether, but I think the exposure comes from Celsius having posted collateral in excess of the amounts it borrowed from Tether.”
As previously reported, Celsius allegedly borrowed $1 billion from Tether with Bitcoin (BTC) in 2021. Celsius founder Alex Mashinsky stated that the company was paying an interest rate of between 5% and 6%. . In June 2022, Tether said it paid off the $900 million loan, which happened about a month after Celsius halted withdrawals.
According to the latest examiner report, the amount of the loan was much higher than USD 1 billion. “Celsius had borrowed $1.823 million from Tether’s USDT stablecoin, collateralizing $2.612 million of its assets under management,” wrote examiner Shubber, adding that the collateral amounted to 17% of all Celsius assets.
Aside from providing massive loans to Celsius, Tether is known as an early investor in the failing company. In 2020, Celsius secured a $10 million capital raise from Tether, and Mashinsky singled it out as a major endorsement of the firm.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the entire amount invested may be lost. The services or products offered are not directed or accessible to investors in Spain.
