Tether responded to "rumors" about its commercial paper portfolio
In a statement released by Lanyard on Wednesday morning, the company rejected the "false rumors" about the reserves supporting the USDT stable currency.
In a blog article, the company said that the statement that 85% of its commercial paper portfolio was guaranteed by Chinese or Asian companies and the unsecured short-term bonds were traded at a discount of 30% was "completely wrong", and speculated that this statement was being "coordinated" online to scare off investors and profit from Tether's failure.
According to the data of CoinMarketCap, Tether's USDT is the largest stable currency with a market value of more than US $70 billion. However, recently due to the collapse of Terra's algorithmic stable currency, it was hit and gave way to the stable currency USDC, a competitor of Circle.
According to the websites of Coinbase and Coinage, the total value of Tether accounts for 7% of the entire cryptocurrency market, which is currently the third most popular asset on Coinbase and Coinage.
The statement aims to calm investors' concerns. In the broader market crash of cryptocurrency, investors may feel nervous about the security of their investment after the withdrawal of cryptocurrency platform suspended at Celsius on Sunday.
Tether said: "At present, Tether's exposure to Celsius Company is zero, except for a small amount of investment from the company's equity." Tether pointed out that it has over-collateralized the borrowing activities of Celsius Company, and "has no loss" in clearing the company's position.
Tether also said that other rumors were also buried, and said that its statement of "loan exposure to Three Arrows Capital" was "absolutely wrong". Sanjian, a cryptocurrency hedge fund, is currently facing unpredictable liquidation.
"Stable currency" is a cryptocurrency, which is linked to the price of assets (usually legal tender such as US dollar), and claims to be backed by foreign exchange reserves to enable holders to convert stable currency into relevant assets.
Tether quoted the latest guarantee opinion provided by the Cayman Islands accounting firm MHA Cayman on March 31 in its statement, saying that 47% (US $39 billion) of the guarantee of USDT was composed of US treasury bills.
It also claimed that less than 25% of Tether's support was composed of commercial paper, which was unsecured debt, and the company agreed to pay an additional premium before a specific date. According to the latest guarantee opinion, Tether's assets of $20 billion are composed of the company's commercial paper and certificates of deposit issued by financial institutions. In May this year, Tether Chief Technology Officer Paolo Ardoino said that the stable currency provider had halved the number of commercial paper supporting USDT, which he reiterated on Twitter today.
When asked how much of Tether's commercial paper portfolio is backed by the debt of Chinese or Asian companies, the company did not immediately reply to the decrypted email.
Tether said that as the commercial paper matures, it will convert its funds into US government bonds, and said that its current commercial paper portfolio has been reduced to US $11 billion since March 31, and will reach US $8.4 billion by the end of June.
In addition to the above assets, Tether has also been supported by other assets, including cash, corporate bonds, money market funds and precious metals. The guarantee statement said that Tether's total assets exceeded its liabilities by more than $162 million, of which more than 99% was related to the value of its issued tokens.
In the chapter entitled "Key accounting policies of the management", the assurance statement clarified that "the valuation of (Tether) assets is based on normal trading conditions and does not reflect unexpected and abnormal market conditions", and added that "the management did not determine the provision for expected credit losses" when the filing document was submitted on March 31.