Loan of over 250 billion yen
On January 31, Tether, which issues the stablecoin USDT, strongly denied reports that it received loans from the failed crypto asset (virtual currency) lender Celsius Network.
Paolo Ardoino, Chief Technology Officer (CTO), responded to the loan to Tether, which was pointed out in Celsius’ bankruptcy filing, saying, “Tether has never borrowed from Celsius.”
Celsius filed for Chapter 11 bankruptcy last July. In August, the U.S. government’s Federal Trustee’s Office asked the court to appoint an independent examiner on bankruptcy filings. Inspector Shoba Pillay, appointed at the end of September, released his final report on January 31 of the following year.
Relation:U.S. Justice Department calls for independent investigator to investigate bankrupt Celsius
In the 470-page bankruptcy report, as of December 2020, it was pointed out that the loans from Celsius to Tether, the bankrupt Alameda Research, and Three Arrows Capital (3AC) greatly exceeded the credit limit. ing.
In Tether’s case, the loan doubled its limit, eventually ballooning to more than 250 billion yen ($2 billion). The inspector referred to Celsius internal documents, and feared that by late September 2021, “Celsius’ capital will not be able to withstand Tether’s default, so its huge exposure poses an existential risk to Celsius.” made it clear.
Mr. Ardoino tweeted as follows in response to such indications.
The document confuses “from” with “to”. Either a typo or a factual error.
A reporter for the Financial Times took to Twitter to offer a different interpretation of the statement in the bankruptcy report that “Celsius is financing Tether,” and agreed with Andoino.
This exposure arises because Celsius has posted collateral in excess of the amount it borrowed from Tether.
In a statement sent to crypto media outlet The Block, Andoino explained:
In the document, Celsius is mentioned as the counterparty that recorded the additional margin. This is what borrowers do to stay within their agreed risk limits.
Tether announced in July last year that it had liquidated its position in Celsius, which had been facing financial difficulties. It revealed that the loan to Celsius was denominated in Bitcoin and had a collateral rate of 130%.
Five days after the announcement, Celsius filed for bankruptcy.
Relation:Tether Liquidates Position in Celsius
Former CEO of Celsius sued
The New York State Attorney General on January 5 sued Celsius co-founder and former CEO Alex Mashinsky for defrauding investors of billions of dollars worth of cryptocurrency.
Law enforcement officials will hold him accountable for repeatedly making false and misleading statements about safety, covering up losses and failing to register as a securities and commodities trader.
Mashinsky announced his resignation as CEO on Sept. 27 last year, but sources familiar with the matter said Mashinsky had taken about ¥1.3 billion ($10 million) from Celsius’ accounts prior to filing for bankruptcy. Reported to have been taken out.
The bankruptcy filing alleges that Celsius misused client funds for several years, including helping Mashinsky withdraw large sums of money.
Relation:New York Attorney General Sues Ex-Celsius CEO, Who Is Filing For Bankruptcy
The post Tether CTO denies borrowing from Celsius, refutes bankruptcy filing appeared first on Our Bitcoin News.