Tether dismissed what it labeled as “false rumors” regarding the reserves that back its USDT stablecoin in a statement released Wednesday morning.

It said in a blog post the notion its “commercial paper portfolio is 85% backed by Chinese or Asian” unsecured, short-term debt issued by companies and traded at a 30% discount is “completely false” and speculated the assertions are being spread online in a “coordinated” way to spook investors out of Tether and turn a profit on its failure.

Tether’s USDT is by far the largest stablecoin by market capitalization at over $70 billion, but it recently took a hit amid the collapse of Terra’s algorithmic stablecoin UST, according to data from CoinMarketCap, as it ceded ground to Circle’s rival stablecoin USDC


Tether’s total value represents 7% of the entire crypto market, and it is currently the third most popular asset on Coinbase and Binance, according to the exchanges’ websites.

The announcement aims to quell the concerns of investors fearful amid a broader market crash in cryptocurrencies, who may be nervous about the security of their investments after crypto lending platform Celsius paused withdrawals on Sunday.

“Tether has currently zero exposure to Celsius apart from a small investment made out of Tether equity in the company,” said Tether, noting it overcollateralized its borrowing activity with Celsius and experienced “no losses” in liquidating the firm’s position.

Tether also said other rumors are being planted and suggestions it has “lending exposure to Three Arrows Capital,” a crypto hedge fund currently facing unforeseen liquidations, is “categorically false.”

A stablecoin is a type of cryptocurrency that is pegged to the price of an asset (usually a fiat currency such as the U.S. Dollar) and claims to be backed by reserves that enable holders to redeem their stablecoins for the asset in question.


In its statement, Tether linked to its latest assurance opinion from March 31, carried out by Cayman Islands-based accounting firm MHA Cayman, stating that 47% or $39 billion of USDT’s backing is composed of U.S. Treasury Bills.

It also claims less than 25% of Tether’s backing is made up of commercial paper, which is unsecured debt that companies agree to pay plus a premium by a certain date. The latest assurance opinion discloses that $20 billion of Tether’s assets are made up of commercial paper from corporations and certificates of deposit issued by financial institutions. In May, Tether CTO Paolo Ardoino said that the stablecoin provider had halved the amount of commercial paper backing USDT, a claim he reiterated on Twitter today.

When asked what percentage of Tether’s commercial paper portfolio is backed by debt from Chinese or Asian companies, the company did not immediately respond to emails from Decrypt.

As its commercial paper matures it will be rolling funds into U.S. Treasuries, Tether said, claiming its current portfolio of commercial paper has been reduced to $11 billion since March 31 and will be $8.4 billion by the end of June.

Tether is also backed by other assets aside from those previously mentioned, including cash, corporate bonds, money market funds, and precious metals. The assurance statement said Tether’s total assets exceed its liabilities by over $162 million, of which more than 99% relate to the value of its tokens issued.

Under a section titled “Management’s Key Accounting Policies,” the assurance statement clarifies the “valuation of the assets of [Tether] is based on normal trading conditions and does not reflect unexpected and extraordinary market conditions,” adding that “no provision for expected credit losses was identified by management” at the time of its filing on March 31.

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