Key takeaways:
- Tether CTO Paolo Ardoino, claims that Tether has “never borrowed from Celsius.”
- The latest insolvency examiner’s report wrongly identified Tether as one of Celsius’ borrowers, which prompted Ardoino to respond with a statement.
Tether, the organisation that created USDT, the most valuable stablecoin in the world at one point, asserts that it never took out a loan from the now-defunct cryptocurrency lender Celsius.
In a Twitter discussion on the Celsius examiner report, Ardoino addressed claims that Tether, Three Arrows Capital, and Alameda Research were exceeding their credit limits with the insolvent lender.
According to the audit, the stablecoin issuer constituted an “existential threat” to the lender’s financial stability and had over $2 billion of exposure to Celsius. It also stated that Celsius’ capital wouldn’t be enough to prevent a Tether default.
On page 183 of the examiner report, which was published on January 31, it was noted that “Celsius’s loans to Tether were twice its credit limit.”
Financial Times reporter @kadhim, a user on Twitter, explained the report in layman’s words. He cited the report and explained how Celsius encouraged staff, including CEO Alex Mashinsky, to sell by using money from investors and customers to support the value of its own CEL currency.
The document confuses “from” and “to,” according to Ardoino’s response to a tweet from his thread. The CTO believes that either a typo or a mischaracterization occurred in this instance.
The twitter user agreed that the examiner report is connected to some degree of misunderstanding, saying:
“The examiner’s report above depicts Celsius as having made “loans” to Tether, but in my opinion, the exposure is caused by the fact that Celsius put up collateral that was more than the sums it borrowed from Tether.
Tether is well-known for being an early investor in Celsius in addition to offering loans. Tether contributed $10 million to the company’s stock fundraising in 2020, with CEO Alex Mashinsky touting Tether’s support for the venture.
Numerous issues have emerged at celsius since since the 689-page report was released. The final examiner’s report on Celsius Network exposes the cryptocurrency lender’s terrible management and wasteful working methods.
Many even feel that Celsius’s business strategy was fundamentally flawed.
