The company in charge of USDT included issues about the state of its commercial paper reserves and denied links to Celsius and Three Arrows Capital, which could present insolvency.
Stablecoin issuing company Tether added some allegations linked to the state of its commercial paper reserves and the alleged ties to some entities rumored to present insolvency.
In a statement on Wednesday, the firm denied rumors that its “commercial paper portfolio got supported by 85% by Chinese or Asian commercial paper and is trading at a 30% discount. Tether called the allegations a complete lie and stated that those lies likely got spread to generate more panic and profit in an already damaged market.
The statement highlights a report by Bloomberg in December last year stating that a significant part of the firm’s USDT stable coin holdings got backed by short-term debt from Chinese real estate companies.
As Crypto Briefing recalls, at the time, the financial markets were in a state of fear over the possible Crashdown of Evergrande, the largest real estate developer based in China. Tether denied having any debt to Evergrande and classified the report as false propaganda.
Tether Spoke About Rumors About USDT Reserves
Citing its latest reserves report revealed in May, the issuer of the world’s largest stable coin, USDT, explained that more than 47% of the total reserves supporting USDT are now US Treasury bonds, classified as one of the most secure tools to invest. The company also stood firm on its objective to minimize its reserves of commercial paper.
In its report last month, Tether highlighted that commercial paper, a form of short-term unsecured corporate debt, accounted for less than 25% of its reserves. The company then explained that it had diminished its commercial paper reserves by more than 17% and clarified that it counts on the final plan of eradicating this backup instrument.
No ties to Celsius and Three Arrows Capital
Tether also spoke about the problems that crypto lending service Celsius is currently facing and denied its links to that entity. The issuer determined that the Celsius position got liquidated without a loss before withdrawals went frozen on Monday. The entity exposed that Tether currently has zero exposure to Celsius apart from a small investment achieved with Tether equity.
According to CoinDesk, an operation last year determined that Tether had lent $1 billion to Celsius through Bitcoin as collateral. Tether added in the most recent statement that its lending activities with Celsius and other borrowers have always been overcollateralized.
The company in charge of USDT also denied reports mentioning it counts on credit exposure to crypto venture capital firm Three Arrows Capital. According to a report by The Block, the fund, one of the most prominent investors in Terra, is now facing possible insolvency after presenting $400 million in liquidations.
The makeup of USDT reserves has long been a concern, and this is not the first time the company faced a wave of fears among investors regarding their retains and the crypto market in general.
By: Jenson Nuñez
