Tether Shares Another Rebuttal, Denies Chinese Commercial Paper Holdings

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Tether Shares Another Rebuttal, Denies Chinese Commercial Paper Holdings
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key takeaways

Tether reiterated that it has no exposure to Chinese commercial paper. It also stated that the spread of “false information” is the biggest threat to the cryptocurrency industry today. Tether’s CTO Paolo Ardoino said on Twitter today that crypto media publication CoinDesk “loves recycling FUD around Tether.”

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Tether has said that spreading false information about its reserve assets is “the greatest threat to the cryptocurrency industry as it exists today.”

Tether denies China commercial paper exposure

Tether described rumors of its alleged exposure to Chinese commercial paper as “false information.”

exist Wednesday’s announcement, the USDT issuer said that spreading “false information is the biggest threat to the cryptocurrency industry that exists today,” as it again denied it holds any Chinese commercial paper. Responding to rumors that USDT is partially backed by Chinese property developer debt, Tether wrote:

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“Tether’s portfolio does not hold Chinese commercial paper, and as of today, its total exposure to commercial paper has been reduced again to only about 3.7B (from 30B in July 2021), with plans to further reduce to about 30B by the end of August 2022 200 million and drop to zero in late October/early November 2022.”

Following the announcement, Paolo Ardoino, CTO of Tether and cryptocurrency exchange Bitfinex, took to CoinDesk directly to accuse the rumors, Say On Twitter, the publication likes “Recycling FUD [fear, uncertainty, doubt] around the tether. ” CoinDesk is owned by Digital Currency Group, which also invests in Tether’s main competitor Circle, the issuer of the industry’s second-largest stablecoin, USDC.

Rumors about the state of Tether’s reserve backing have been circulating in the crypto community and mainstream media for years — the company has consistently fired As misinformation or “FUD” concerns. The company’s ongoing controversy since then appears to have stemmed from the fact that Tether has never received or issued an audit by a reputable third-party audit firm. By failing to do so, stablecoin issuers are effectively asking the cryptocurrency industry to trust its claims about the soundness of their reserves—a practice that goes against the community’s “distrust, verify” spirit.

Tether began reducing its commercial paper exposure in May to reduce the risk profile of its USDT reserves. It plans to reduce its paper asset holdings to zero by early November and increase its exposure to U.S. Treasuries, instruments generally considered much safer than commercial paper.

Disclosure: At the time of writing, the author of this article owns ETH and several other cryptocurrencies.

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