Summary: Tether dismissed what they called “false rumors” surrounding their reserve that backs their stablecoin USDT, and rumors that suggested Tether was exposed to Celsius and Three Arrows Capital in a statement released Wednesday morning. When mentioning rumors that its commercial paper portfolio is backed by Chinese or Asian commercial papers and being traded at a ...
Tether dismissed what they called “false rumors” surrounding their reserve that backs their stablecoin USDT, and rumors that suggested Tether was exposed to Celsius and Three Arrows Capital in a statement released Wednesday morning.
When mentioning rumors that its commercial paper portfolio is backed by Chinese or Asian commercial papers and being traded at a 30% discount, Tether said those rumors are “completely false” and are most likely spread to further panic already consuming the market.
In its latest assurance opinion, Tether also announced that over 47% of total USDT reserves are U.S. Treasuries while less than 25% are from commercial paper. It also stated that their commercial paper portfolio has been reduced from 20 billion to 8.4 billion and will continue to zero without incurrences of losses.
In addition, they also denied rumors that suggested it was exposed to Celsius and Three Arrows Capital.
“Tether has currently zero exposure to Celsius apart from a small investment made out of Tether equity in the company,” the announcement said. “Tether is aware of other rumors being spread, suggesting that it has lending exposure to Three Arrows Capital - again this is categorically false.”
Bitpush reported Wednesday morning that Three Arrows Capital (3AC), is facing possible insolvency problems after incurring at least $400 million in liquidations, which seemed to be confirmed by one of the founders Su Zhu via Twitter.
Bitpush also reported Monday that Celsius paused all withdrawals, Swap and transfers between accounts as it too is experiencing the ramifications of “extreme market conditions.” Celsius has yet to unpause these actions on their platform and has not yet come up with a timeframe for the pause.
While it is surely turbulent times for these two companies, Tether confirmed that they have not been affected by these recent events.
Meanwhile, Tether’s chief technology officer (CTO), Paolo Ardoino also confirmed that Tether had no exposure to Celsius or 3AC via twitter.
Tether’s USDT is the largest stablecoin by market capitalization at over $70 billion, but recently took a hit after the collapse of Terra’s algorithmic stablecoin, UST, which is now known as USTC, as per Bitpush Terminal data. Tether also represents a massive percentage of the entire crypto market, coming in at 7%. It is the third most popular asset on Coinbase and Binance, according to those individual websites.
This announcement aims to mitigate the concerts of fearful investors during this market crash that has seen the crypto market and traditional stock market go down substantially.
As a result, the Fed is once again looking to get involved and may raise interest rates by 0.75% or .75 percentage points at their meeting this week, according to the Wall Street Journal. Early estimates suggested that the Fed was expected to raise interest rates by a half percentage point this week and again in July.
However, last week’s inflation report from the Labor Department showed a big jump in prices, which could potentially cause the Fed to move their 0.5 percentage points to 0.75.
Author: Tyler Irvin