News and analysis for the professional investor. A commercial paper report from Evergrande at the end of 2021 showed its main unit had $32 billion, just around 10% of its total liabilities. No, I think this theory is baloney. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. Yet, does Tether truly own a lot of Chinese commercial paper? According to the attorney-generals investigation, there were instances when Tether was not fully backed in the past. var pid588602 = window.pid588602 || rnd; We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities. How the biggest companies plan mass lay-offs, The benefits of revealing neurodiversity in the workplace, Tim Peake: I do not see us having a problem getting to Mars, Michelle Yeoh: Finally we are being seen, Our ski trip made me question my life choices, Apocalypse then: lessons from history in tackling climate shocks, Stablecoins: bitcoin for squares has its own downsides. "Don't let it become a loss. promo Polygon (MATIC) Price Dropped 9% in One Day so Wheres It Headed Next? Many stablecoin companies have followed Tether's lead both with attestation and the use of commercial paper. Tether does not hold any commercial paper or other debt or securities issued by Evergrande and has never done so, the company said. It is also alleged that Tether also owns commercial paper issued by Evergrande, China's second-largest real estate developer, which is itself experiencing a major liquidity crisis. cookies var plc588602 = window.plc588602 || 0; Mad Money Twitter - Jim Cramer Twitter - Facebook - Instagram, Questions, comments, suggestions for the "Mad Money" website? Learn more about Consensus 2023, CoinDesks longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Evergrande, which has total liabilities of more than $300 billion, is also in the spotlight as it scrambles to raise funds, teetering between a messy meltdown with far-reaching impacts, a managed collapse or a government bailout. The value of loans backing Tether's stablecoin reserves could be a risk factor for the crypto industry. About half of Tether's roughly $75 billion in assets, which back USDT, is in commercial paper. This type of debt financing is back in the limelight as China's second largest property developer Evergrande teeters on the brink of default. "It's impossible to reach these levels of success in such a short time without genuine organic interest and really wide demand from the broader crypto trading industry," Paolo Ardoino, Tether's chief technology officer, told Insider in a recent interview. A wave of smaller stock frauds from 2010-2016 were chronicled in the documentary The China Hustle, and Luckin Coffee put an exclamation point on the trend in 2019. Get the latest business insights from Dun & Bradstreet. According to documents received byBloomberg BusinessWeek, Tether has extended billions of dollars in loans to large Chinese companies. He said that the New York attorney-general had no clear findings that customers at any point were at risk of being unable to redeem tethers because of a lack of backing. A growing swarm of debris in space has led the U.S. government to attempt to set new space hygiene norms, while private companies are also investing in ways to tackle the messy orbital environment. However, as Tethers reserve holdings have been questioned by regulators such as the New York attorney-general in the past, providing banking services to Tether will likely raise reputational risk concerns, wrote the JPMorgan analysts. I think one time, Stanley mentioned when he saw employees on downtime he . "So Tether is extremely glad that there is a USDC, that there is Paxos and all the other stablecoins, because that is how we become an industry.". CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. But these have frequently raised more questions than answers. Stay up to date with what you want to know. This license does not include nor permit your resale or commercial use of the Site or its contents. ", Regulators are starting to pay greater attention to stablecoins - digital tokens which are pegged in value to other assets, often the U.S. dollar, and backed by a pool of assets - and some observers have raised concerns about the tokens' liquidity in a time of stress. HONGKONG Tether, the worlds largest stablecoin, said in a statement it does not hold any commercial paper or securities issued by embattled developer China Evergrande Group, as regulatory scrutiny into risks from this type of token grow. Tether still expects to be the first to secure an external financial statement audit, which it has been exploring since 2017, but it won't necessarily be from one of the Big Four accountants. But since it's unsecured, there is also very little recourse for investors if an issuer does default. Approximately half of Tether's $62.8 billion assets as of the end of June 2021, were backed by commercial paper and certificates of deposit, according to the company. The downgrade notice was sent to Evergrande on Sept. 15 from China Chengxin International. This story was seen first on BeInCrypto Join our Telegram Group and get trading signals, a free trading course and more stories like this on BeInCrypto, Ukraine Latest: Russia Continues Efforts to Encircle Bakhmut, INSIGHT-Before fatal collapse, Turkish building had skirted code thanks to Erdogan policy, In Chicago, adapting electric buses to winters challenges, Ukraine ally Kallas fights for reelection in Estonia vote, Global race to boost electric vehicle range in cold weather. How China's Property Market Could Trigger a Crypto Crash China Evergrande Group Flashes Default Warnings, Tether Says We Don't Tether, Inc. Company Profile | Seattle, WA - Dun & Bradstreet Given Tethers record to this point, that may take a while. Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28. All Rights Reserved. First Mover The latest moves in crypto markets, in context. The Chinese real-estate giant is facing down $300 billion in debt that it cant pay back. Balancing Innovation and Regulation: Why a Risk-Based Approach to Crypto Could Benefit America, Crypto Price Predictions, March 2023: Altcoins Are About to Take a Wild Turn, Top 10 Telegram Channels for Crypto Signals in 2023, Binance Accused of Malpractices Similar to FTX, Navigating Crypto Taxes Made Easy & Cheap: Meet Cryptiony. Neither Tether nor Bitfinex admitted wrongdoing. Something weird happened today in crypto-world. A Bloomberg report has claimed to have found that Tether holds billions of dollars worth of Chinese commercial paper. Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28. Understanding the magnitude of size and growth of USDT, bitcoin and Chinese commercial paper may help give some perspective to the latest headlines. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. Evergrande, Chinas second-largest property developer by sales, recently warned that it was in danger of defaulting on massive debts. Bitcoin and other cryptocurrencies were crashing Monday amid a global selloff in risk assets. Stablecoin Tether says holds no Evergrande commercial paper Such holdings of companies short-term debt would make it the seventh largest in the world. Editing by Mark Potter, How China's new No.2 hastened the end of Xi's zero-COVID policy, Silvergate suspends crypto payments network; shares fall after-hours, Bank of Canada to hold rates steady at 4.50% through this year, Analysis: Sharp drop in equity premium may mark return of 60/40 portfolio, As space junk threat grows, government and investors seek solutions, Brazil's Petrobras faces legal risks after halting asset sales -lawyers, Nissan and Mexican workers agree to 9% raise at Morelos plant, union says, EIA blames crude oil blending, under-reported output for high adjustments in US data, American Airlines, flight attendants union seek mediation in contract negotiations, Exclusive news, data and analytics for financial market professionals. With Tether we are welcoming all that. Tether said that it funnelled roughly half its reserves into commercial paper. The. clarified that Tether does not hold Evergrande's commercial paper. "But tons of Chinese businesses stand to get crushed by this fiasco, and they have Evergrande exposure, and that could spell real trouble if the dominoes fall here.". David Z. Morris is CoinDesk's Chief Insights Columnist. A stock exchange filing added that Evergrande was added to a watch list for possible further downgrades in the future. Tethers claims that its virtual currency was fully backed by US dollars at all times was a lie, said attorney-general Letitia James in February. var absrc = 'https://servedbyadbutler.com/adserve/;ID=177750;size=0x0;setID=588602;type=js;sw='+screen.width+';sh='+screen.height+';spr='+window.devicePixelRatio+';kw='+abkw+';pid='+pid588602+';place='+(plc588602++)+';rnd='+rnd+';click=CLICK_MACRO_PLACEHOLDER'; Chinas loose and reactive (at best) financial regulatory environment is one reason anxiety around Tether has largely centered on whether it holds Chinese commercial paper in general not just whether it holds Evergrandes. "The problem with tether is that it's backed by various holdings and roughly half of those are commercial paper short-term loans and much of that is believed to be, but we don't know, Chinese commercial paper," Cramer said. Stanley will arrange a new seating arrangement sporadically. Commercial paper is a form of unsecured, short-term debt issued by companies that doesn't need to be registered with the Securities and Exchange Commission (SEC) as long as it matures before nine months. This stability means they offer an accessible - if boring - entry and exit point to the crypto world. "Right now, owning crypto is what's known as a 'crowded' trade and I don't want you to lose money if this space keeps getting hit by Evergrande's contagion worries," he said. Tether Reviews: What Is It Like to Work At Tether? | Glassdoor read more. Kryptowhrungsunterricht/E-Book-Download. Tether has been beset by transparency concerns in the past as well. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. document.write(''); Stablecoin Tether says it does not hold any commercial paper from Evergrande in recent a statement. Stablecoin Tether says holds no Evergrande commercial paper - Yahoo! Tether's market capitalization surged 357% in the last year to around $69 billion. Evergrande has failed to execute on the promises backing its roughly $300 billion in debt, particularly in housing. By signing up, you will receive emails about CoinDesk products and you agree to ourterms & conditionsandprivacy policy. He also shares his expectations on stablecoin regulation and competition. It seems increasingly likely that Evergrande is fated instead for the glue factory. NOW WATCH: WATCH: How any business can use live shopping to net thousands of dollars per stream, said every tether coin was fully backed by US dollars in bank accounts. (Reporting by Alun John; Editing by Mark Potter), Ukraine Latest: Russia Continues Efforts to Encircle Bakhmut, INSIGHT-Before fatal collapse, Turkish building had skirted code thanks to Erdogan policy, In Chicago, adapting electric buses to winters challenges, Ukraine ally Kallas fights for reelection in Estonia vote, Global race to boost electric vehicle range in cold weather. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. Your weekly wrap of Web3 news and trends. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. By signing up, you will receive emails about CoinDesk products and you agree to ourterms & conditionsandprivacy policy. We want to hear from you. Tether's USDT remains the dominant stablecoin in the market despite the FUD surrounding the coin. That marks a significant decrease in commercial paper, from $24 billion to $20 billion in the first quarter of 2022. Debate swirls about whether that impact would spread beyond China, but theres broad agreement that impact within the country would be near catastrophic. Approximately half of Tether's $62.8 billion assets as of the end of June 2021, were backed by commercial paper and certificates of deposit, according to the company. Cramer urges investors to take some crypto profits, citing Evergrande-related risks, struggling Chinese property developer Evergrande, stablecoin that's pegged to the U.S. dollar, third-largest cryptocurrency by market value. Money Reimagined The transformation of value in the digital age. Tether operates a so-called stablecoin, which it says is backed one-for-one by dollar assets. But he did lay out his timeline expectations for regulation. Ardoino joined Tether back in late 2015 as a developer before being appointed chief technology officer around a year later. Contact - Tether Your Use of the Site. Your weekly wrap of Web3 news and trends. They are, in theory, backed by reserves, such as short-term government bonds and the currency itself. The report revealed that the stablecoin company also provided a billion-dollar loan to Celsius, a centralized crypto lending platform that was recently accused of violating securities laws by the U.S. States of Alabama, Texas, and New Jersey. HONG KONG, Sept 16 (Reuters) - Tether, the world's largest 'stablecoin', said in a statement it does not hold any commercial paper or securities issued by embattled developer China Evergrande Group (3333.HK), as regulatory scrutiny into risks from this type of token grow. See here for a complete list of exchanges and delays. That has included harshly curtailing apparently successful fintech firms like Ant Group and, most recently, instituting restrictions on video games, which cant be good for Tencent and other firms. All quotes delayed a minimum of 15 minutes. In November 2018, it had to transfer a substantial portion of its backing to Bitfinex after a loss of funds, meaning that it no longer met its claim of being fully backed by US dollars. Tether, Bitcoin and Chinese Commercial Paper at Scale Webinars Indices Markets Finance Technology Web3 Policy Sponsored Content Upcoming event Yuga Labs, Google and More TV & Videos TV & Videos. Evergrande, for its part, is the largest commercial paper issuer in China's real estate market, owning some $32 billion worth of commercial paper at the end of last year. HONG KONG (Reuters) - Tether, the world's largest 'stablecoin', said in a statement it does not hold any commercial paper or securities issued by embattled developer China Evergrande Group, as regulatory scrutiny into risks from this type of token grow. What financial advisors need to know about crypto. Evergrande's main unit had 205.7 billion yuan ($32 billion) worth of commercial paper at the end of 2020, filings show. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. Tether's Paolo Ardoino on Reserves, Regulation and Evergrande Evergrande has now had to suspend trading of that units onshore corporate bonds following a downgrade, another red flag pointing towards an impending default. "The vast majority of the commercial paper held by Tether is in A-2 and above rated issuers.". The company is currently under investigation by multiple law enforcement agencies, including the U.S. Department of Justice and the Federal Bureau of Investigation. The systematic suppression that characterizes Chinese markets adds an opaque but potentially huge risk for the holders of any Chinese asset even if that risk is wrapped up in a supposed stablecoin. Ardoino clarified that Tether does not hold Evergrande's commercial paper. However, Tether is very secretive about its holdings, only disclosing that it does hold international commercial paper. Since Tether doesnt disclose specifics about the commercial paper that substantially backs its stablecoin, this is a bit like serving a houseguest a sandwich and loudly assuring them that it is absolutely NOT made from diseased horsemeat. Just two years ago, USDTs market cap was a mere $4 billion. "Tether does not hold any commercial paper or other debt or securities issued by Evergrande and has never done so," the company said. But tether's growth of around 3,350% since early 2019 is seen as reason to celebrate. The developer on Thursday applied to suspend trading of that unit's onshore corporate bonds following a downgrade, which market participants said indicated an increasing likelihood of defaults and restructuring. However that's not stopped its popularity. The stablecoin issuer Tether this week declared that it doesnt hold short-term debt issued by troubled Chinese real estate developer Evergrande. Evergrande, China's second-largest property developer, is to blame. He is also now CTO of cryptocurrency exchange Bitfinex. ConsenSys to Launch zkEVM Testnet as Battle for ZK Supremacy Heats Up, Binance Continues to Battle FUD as US Senators Go After Balance Sheets, Coinbase Moves Into More Stable World of Asset Management with Latest Acquisition, EOS Pumps 10% Amid Broader Market Correction due to EVM Speculation. How Ethereum's evolution impacts crypto markets. Among other signs of serious mismanagement, customers have made large deposits on Evergrande apartments that were never built. The enshittification of apps is real. Concerns intensified after Evergrande admitted in June it did not pay some commercial paper on time, and news in July a Chinese court froze a $20 million bank deposit held by the firm on the . The US Treasury is expected to release an in-depth report on stablecoins any day now. Tether is a typical design firm that will value the client's needs over their employees. "So if you own crypto in any form and you've got big gains, I recommend taking something off the table.". Our Standards: The Thomson Reuters Trust Principles. The developer on Thursday applied to suspend trading of that units onshore corporate bonds following a downgrade, which market participants said indicated an increasing likelihood of defaults and restructuring. Head to consensus.coindesk.com to register and buy your pass now. But these are the same rating agencies that are rating the US Treasuries," Ardoino said. Be a smarter, safer investor in eight weeks. Evergrande's main unit had 205.7 billion yuan ($32 billion) worth of commercial paper at the end of 2020, filings show. In response to the Bloomberg BW report, it released a blog post claiming that the report is spreading misinformation.. The stablecoin issuer says its goal is to reduce its commercial paper holdings to zero. Evergrande's main unit had 205.7 billion yuan ($32 billion) worth of commercial paper at the end of 2020, filings show. 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