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Tether denies borrowing from bankrupt Celsius
Celsius' examiner report claimed Tether had over $2 billion Celsius exposure and was an "existential threat" to the lender's financial health.
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Updated: Feb. 1, 2023 at 6:37 am UTC
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Tether’s (USDT) chief technology officer Paolo Ardoino has denied that the stablecoin issuer took a loan from Celsius in a Jan. 31 tweet.
Ardoino responded to a Twitter thread on the Celsius examiner report that said that Tether, alongside Three Arrows Capital and Alameda Research, could exceed their credit limits with the bankrupt lender.
The report claimed that the stablecoin issuer had over $2 billion exposure to Celsius and was considered an “existential threat” to the lender’s financial health. It added that Celsius’ couldn’t survive a Tether default because its capital was insufficient.
“The Tether exposure eventually grew to over $2 billion -a number so large that in late September 2021, that exposure was described to the Risk Committee as present[ing] an ‘existential threat’ to Celsius.”
However, Ardoino has denied these claims saying the document either made a typographical error or a mischaracterization. According to him, Tether never borrowed from Celsius.
In a July 2022 statement, Tether said it liquidated a loan to the crypto lending firm without incurring any losses. The stablecoin issuer did not state the dollar value of the loan.
Meanwhile, Tether said it would stop its secured lending practices in 2023.
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Launched in 2014, Tether is a blockchain-enabled platform designed to facilitate the use of fiat currencies in a digital manner.
Tether Limited
Tether Limited is the company that introduced Tether (USD₮ or USDT), an asset-backed cryptocurrency stablecoin, in 2014.
Celsius Network
Celsius Network is a bankrupt cryptocurrency lending company that was founded in 2017 and headquartered in Hoboken, New Jersey.
Alameda Research
Alameda Research was once a principal trading firm, operating as an arm of the failed crypto exchange, FTX.
Three Arrows Capital
Three Arrows Capital (3AC), a Singapore-based crypto hedge fund, collapsed due to poor risk management, recklessness in dealing with business partners and a significant portion of greed.
Paolo Ardoino joined Bitfinex at the beginning of 2015 and now serves as Chief Technology Officer.