The Celsius Bankruptcy: What You Need to Know

The rabbit hole of cryptocurrency finance just got deeper with the recent developments surrounding Celsius, the now-defunct crypto lender. Their bankruptcy examiners had some spicy news that allegedly tied Tether (USDT) and loans together, stirring up the waters in an already tumultuous sea of digital assets. But before we dive deeper, let’s clarify the basics of this financial fiasco.

Tether’s Strong Denial

Paolo Ardoino, the Chief Technology Officer at Tether and Bitfinex, took to social media to vehemently deny any association with the loans claimed in a recent examiner report. His tweet on January 31 read, “Tether has never borrowed from Celsius.” Strong words for a company often mired in the drama of volatile assets!

The Examiner Report: Fact or Fiction?

The examiner’s report, released alongside the bankruptcy proceedings, suggested that Tether was involved in loans that were apparently beyond Celsius’ credit limits, poking a hole in the integrity of one of the biggest stablecoins out there. It stated, “Celsius’s loans to Tether were twice its credit limit,” which had many raising eyebrows, and of course, speculation followed suit.

Ardoino’s Take on the Report

With the speed of a crypto transaction, Ardoino suggested that there may have been a mix-up in terms. He pointed out that what was likely meant was that “Celsius had loans from Tether” instead of the other way around. It’s as if the circus of finance had misplaced its acts! He suggested it could be either a typo or a mischaracterization, firmly establishing that Tether is not in the debtor’s box.

Shubber Weighs In

Kadhim Shubber, a Financial Times reporter, chimed in, indicating some misinterpretation in the report. He expressed that while the report labeled Celsius’ dealings as loans it had with Tether, it may actually refer to the collateral Celsius posted, which was greater than what they borrowed. This certainly adds another layer of complexity to the already intricate narrative.

What Really Went Down?

Digging a little deeper into the past, it’s established that Celsius borrowed a whopping $1.8 billion in USDT at one point, with collateral that amounted to a staggering 17% of Celsius’ assets. This raises questions about how accurately these transactions were documented and communicated.

Tether’s Investor Role

Tether’s relationship with Celsius doesn’t stop at loans! They were also an early investor, plowing $10 million into the firm back in 2020—quite the endorsement, if you will. This certainly begs the question: could this partnership have led to unnecessary entanglements?

Conclusion: Mistrust in Crypto? More Like Mistranslations

In an industry notorious for its complexities and curveballs, it’s refreshing to have someone like Ardoino attempt to clarify details. As the crypto community continues to shred through the noise, let’s remember: asymmetrical information isn’t just a hedge fund tactic; it’s a reality in the wild world of digital currencies!