Altcoin: Tether, which issues the altcoin USDT, has denied claims that 85 percent of its portfolio of commercial securities is backed by Chinese or Asian commercial securities. As it is known, USDT is the largest stablecoin by market capitalization. Tether, the operator of the USDT stablecoin, responded Wednesday to speculation that the token is backed by low-grade debt. Here are the details…
Tether denied the rumors
Tether said on Wednesday that some of the rumors circulating in this direction are “totally false and likely to cause further panic to make additional profits from an already stressed market.” The issuer of the world’s largest stablecoin, USDT, added that Celsius’s position was liquidated after the crypto lender frozen account withdrawals Monday in response to the sharp drop in the cryptocurrency market.
AmkNews.com As we reported, a study last year revealed that Tether lent $1 billion to Celsius using Bitcoin (BTC) as collateral. Tether also denied rumors of lending to crypto hedge fund Three Arrows Capital, one of the biggest investors in Terra Blockchain. According to a report, the fund is now facing possible bankruptcy after going through $400 million in liquidation. It also denied exposure to Celsius and crypto hedge fund Three Arrows Capital, both of which are facing a flood of liquidations due to falling crypto prices.
The composition of USDT’s reserves has long been an area of concern in the crypto market, particularly with questions regarding vague “trade paper”. Tether reported at the end of March that its assets were $20.1 billion in commercial paper, up from $30.8 billion in June last year, at the last confirmation of its deposits. Tether’s chief technology officer (CTO) said via Twitter that that figure will drop to $8.4 billion by the end of this month.
Altcoin stable after quelling fear in May
A crypto crash in May saw USDT drop as low as $0.95, its weakest level since 2017. After TerraUSD dropped to zero in less than a week, scrutiny for stablecoins has increased. However, USDT is different from UST. USDT is fully collateralized. UST was supported by mutable entities. This resulted in depegging, that is, its departure from the US dollar constant.
USDT has also been able to cope with increased redemptions as Tether claims the stablecoin is in good standing. Tether’s chief technology officer, Paolo Ardoino, claimed that at the height of the May crash, the firm had redeemed $7 billion in 48 hours.
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