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USDT denies receiving loans from Celsius

Last Tuesday (January 31) a report from the designated Celsius examiner, Shoba Pillay, pointed to the lending area of ​​the platform. The report, cited in Bloomberg, says that the platform delivered loans that exceeded its capacity in the event of default. The total amount would be about $25 billion dollars.

It highlights the fact that, in the work of more than 700 pages, Tether is included among the recipients of credits. It is the station of the popular stablecoin USDT, which is the queen of pairs in the crypto market. Consequently, the firm would have received some $2 billion in credits from the now bankrupt platform.

Tether CTO Paolo Ardonio was quick to respond, calling the report a “mischaracterization.” In parallel, the examiner brings to light the alleged concern of the lending platform about Tether’s possible inability to pay. In other words, the firm would be lending beyond its ability to stabilize.

Ardonio downplays Celsius loan report

In his characteristic combative stance in defending the creator of the largest of the stablecoins, Ardonio responded by lashing out at the report. Among other things, he hinted that the wording was riddled with errors, at least in the case of Celsius’ alleged loans to Tether. Those failures, he claims, were probably the result of pressure.

Although Tether was one of the first investors in the platform founded by Alex Mashinsky, he denies having received credits. “The document contains a typo, likely due to the amount of work and pressure that went into putting this presentation together and this resulted in a mischaracterization,” the crypto entrepreneur told The Block.

It adds that, in line with that: “in the document reference is made to Celsius as the counterparty that had to provide an additional margin, an activity that is in fact carried out by the borrower, to stay within the agreed risk parameters.” Thus, he suggests that these kinds of inaccuracies are enough to cast doubt on the credibility of the report.

For Ardonio, these mistakes could be extended to the certainty of the accusations against his company. Thus, according to him, Tether would not have received any type of loans from Celsius.

Tether did not receive loans from Celsius, Ardonio claims.
Paolo Ardonio, CTO of Tether, dismissed the report’s claims.

Risky move with the credits to Tether

As already stated, the credit platform would have risked the funds lent to Tether. In that sense, the amount of money would be two times above the recovery capacity in case of default. This concern was raised by the loan company’s risk committee.

“Tether’s exposure eventually grew to over $2 billion, a number so large that in late September that exposure was rated an existential risk by the Risk Committee,” he explains. Celsius’ capital, he continues, would be insufficient to cover an eventual Tether default.

In any case, the representative of the USDT issuer undermines credibility and questions the credibility of the report. The aforementioned medium assures that he tried to contact Shoba Pillay’s office without receiving a response. The spokesman for the firm he represents, Jenner & Block, refused to provide further information or provide the alleged document cited in his accusation.

On the other hand, it is highlighted that Celsius would have also exceeded its replacement capacity in loans to other bankrupt companies. Among these, Alameda Research and Three Arrows Capital stand out.

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