Tether CTO debunks alleged $2 billion loan from bankrupt crypto lender Celsius – Cryptopolitan

On January 31, Paolo Ardoino—the Chief Technology Officer of Tether and Bitfinex crypto exchange— cleared things up on Twitter regarding USDT’s relationship with Celsius. He stated that they have never borrowed from or had any loan arrangement with the bankrupt cryptocurrency lender.

Also, a tweet was sent in response to the Celsius bankruptcy examiner report, which suggested that Tether— alongside other firms —had purportedly borrowed from Celsius. Page 183 of the same report, released on January 31, stated that “Celsius’s loans to Tether were twice its credit limit.”

The report also mentioned that “Tether’s exposure had reached more than $2 billion,” which became a problem in late September 2021 for Celsius when this figure was described as presenting an “existential risk” to them. Ardoino debunked any exposure to Celsius and suggested that examiner Shoba Pillay mixed up prepositions within the report.

In a Twitter thread initiated by Financial Times reporter Kadhim Shubber, Tether’s CTO mentioned that either the examiner report is a typo or a miscomprehension. Shubber furthered this notion and explained that instead of Celsius having “loans” to Tether, as stated in the examiner report, he said that Celsius’s exposure came from posting collateral exceeding their borrowed amounts from Tether.

Celsius borrowed about $1 billion from Tether with Bitcoin. Alex Mashinsky, Celsius founder, declared his company had been paying a rate of interest between 5% and 6%. However, in June 2022, just one month after Celsius halted withdrawals, Tether announced they liquidated their $900 million loan.

The latest examiner report uncovered that the loan amount was significantly greater than $1 billion. According to examiner Shubber, Celsius had borrowed an astronomical sum of $1.823 billion USDT from Tether and used a collateral worth $2.612 billion, comprising 17% of all its assets under management.

Beyond granting huge loans to Celsius, Tether is distinguished for being an early investor in the bankrupt firm. In 2020, Celsius acquired a $10 million equity raise from Tether, and Mashinsky described it as a crucial endorsement.

Source: https://www.cryptopolitan.com/tether-cto-debunks-2-billion-loan-from-celsius/