According to its chief technology officer, the company behind Tether (USDT), the world’s largest stablecoin by market capitalization, has never received any loans from failed crypto lender Celsius.
Paolo Ardoino, chief technology officer of Tether and crypto exchange Bitfinex, took to Twitter on Jan. 31, reiterating that Tether has “never borrowed from Celsius”.
The tweet was shared in response to Celsius’s bankruptcy examiner’s report, which allegedly incorrectly claimed that Tether was among Celsius’s borrowers alongside companies like Three Arrows Capital, which borrowed $75 million.
Published on January 31, the examiner’s report mentions on page 183 that “Celsius loans to Tether were double its credit limit.”
The report denotes that “Tether exposure eventually grew to over $2 billion”becoming an issue in late September 2021, when it was described to the risk committee as an “existential risk” for Celsius.
In denying any exposure to Celsius, Ardoino suggested that examiner Shoba Pillay mixed up the prepositions in the examiner’s report, meaning “Celsius loans from Tether” instead of “Celsius loans to Tether”.
“This is a typo or incorrect description”Tether’s chief technology officer reports in a Twitter thread proposed by Financial Times reporter Kadhim Shubber.
Shubber also has mentioned that the examiner’s report is associated with a certain level of misunderstanding, stating that:
“The examiner’s report describes that Celsius has ‘loans’ to Tether, but I believe the exposure stems from Celsius posting collateral in excess of the amounts borrowed from Tether.”
As previously reported, Celsius reportedly borrowed $1 billion from Tether with Bitcoin (BTC) in 2021. Celsius founder Alex Mashinsky said the company was paying an interest rate between 5% and 6%. In June 2022, Tether said it had liquidated the $900 million loan, about a month after Celsius stopped withdrawals.
Related: Celsius publishes list of users eligible to withdraw most assets
According to the examiner’s latest report, the loan amount was much larger than $1 billion. “Celsius borrowed $1.823 billion in USDT stablecoins from Tether, pledging $2.612 billion of its assets under management as collateral”reports examiner Shubber, adding that the guarantee amounted to 17% of all Celsius assets.
In addition to providing large loans to Celsius, Tether is notable for being an early investor in the bankrupt company. In 2020, Celsius secured a $10 million capital raise from Tether, with Mashinsky emphasizing the importance of the company’s approval.
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