.jpg?tr=w-500 "Tether CTO Denies Receiving Loans from Bankrupt Celsius")
Tether has reportedly denied borrowing funds from now-bankrupt cryptocurrency lender Celsius.
Paolo Ardoino, the CTO of both Tether (USDT) and Bitfinex crypto exchange, says Tether has "never borrowed from Celsius."
Ardoino's statement was issued in response to the recent bankruptcy examiner's report that mistakenly listed Tether as one of Celsius' borrowers.
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The list in the examiner report included firms like Three Arrows Capital, which borrowed $75 million from Celsius.
In the same report, it was stated that "Celsius' loans to Tether were twice its credit limit." Further, the report added:
The Tether exposure eventually grew to over $2 billion—a number so large that in late September 2021 that exposure was described to the Risk Committee as “present[ing] an ‘existential risk’ to Celsius” because “Celsius’s capital is insufficient to survive a Tether default.”
However, the CTO suggested that the wording in the report may have been a mischaracterization or typo, and the report actually meant "Celsius loans from Tether" instead of "Celsius loans to Tether."
Previously, it was reported that Celsius borrowed $1 billion from Tether using Bitcoin as collateral in 2021, with an interest rate between 5% and 6%. Tether liquidated the $900 million loan in June 2022, about a month after Celsius halted withdrawals.
In addition to providing loans, Tether is also known as an early investor in Celsius. In 2020, Tether invested $10 million in an equity raise for the firm, with CEO Alex Mashinsky highlighting Tether's endorsement of the firm.
