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."

AccessTimeIconJun 15, 2022 at 8:32 a.m. UTC
Updated May 11, 2023 at 5:41 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

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 (BTC) 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.


Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Jamie Crawley

Jamie Crawley is a CoinDesk news reporter based in London.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.