Tether (USDT) – the world’s largest stablecoin by market capitalization – has never received a loan from bankrupt cryptocurrency lender Celsius, according to its chief technology officer.
Paolo Ardoino, CTO at crypto exchanges Tether and Bitfinex, took to Twitter on January 31 to declare that Tether “never borrowed from Celsius.”
The tweet was in response to Celsius’ bankruptcy examiner’s report, which allegedly falsely indicated that Tether was one of Celsius’ borrowers along with firms like Three Arrows Capital, which borrowed $75 million from the company.
Published on January 31, the examiner’s report states that “Celcius’ loan to Tether is twice the credit limit” on page 183.
The report noted that “Tether’s exposure eventually increased to more than $2 billion,” which became a problem at the end of September 2021 as it was described to the risk committee as an “existential risk” to Celsius.
Refusing to expose the problematic Celsius, Ardoino suggested that the examiner Shoba Pillay mix up a preposition in the examiner’s report, which actually means “Celsius borrowed from Tether” instead of “Celsius borrowed for Tether.”
“A typo or character error,” Tether CTO wrote in a Twitter thread started by Financial Times reporter Kadhim Shubber.
Shubber too mentioned if the examiner’s report is associated with some degree of misunderstanding, it states:
“The checker report above describes Celsius as having a ‘debt’ to Tether, but I think the exposure comes from Celsius having posted collateral in excess of the amount borrowed from Tether.”
As previously reported, Celsius is expected to borrow $1 billion from Tether with Bitcoin (BTC) in 2021, with founder Alex Mashinsky stating that Celsius is paying an interest rate of between 5% and 6%. In June 2022, Tether said it will eliminate the $900 loan, which is about a month after Celsius stopped withdrawing.
related: Celsius published a list of eligible users to withdraw the majority of their assets
The loan amount is greater than $1 billion, however, according to the most recent auditor’s report. “Celsius has borrowed $1.823 billion from the USDT stablecoin from Tether, posting as collateral $2.612 billion from an asset under management,” Shubber wrote, adding that the collateral amounts to 17% of all Celsius’ assets.
In addition to providing a large loan to Celsius, Tether is known as an early investor in bankrupt companies. In 2020, Celsius received a $10 million equity raise from Tether, with CEO Mashinsky highlighting an important endorsement from the company.