Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. The company is currently under investigation by multiple law enforcement agencies, including the U.S. Department of Justice and the Federal Bureau of Investigation. Tether Denies Holding Commercial Paper Issued by Troubled - NXTmine Its been going on for a long time one analyst who warned about Evergrandes practices as early as 2012 was temporarily banned from Hong Kong markets by regulators for his reckless claims. "So if you own crypto in any form and you've got big gains, I recommend taking something off the table.". clarified that Tether does not hold Evergrande's commercial paper. 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. Evergrande is just the latest major Chinese firm to have serious problems due to apparent fraud or mismanagement. A report from the end of 2020 shows that Evergrande has just around 10% of the money owed. 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 . The stablecoin issuer Tether this week declared that it doesnt hold short-term debt issued by troubled Chinese real estate developer Evergrande. 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By signing up, you will receive emails about CoinDesk product updates, events and marketing and you agree to our, Bankman-Fried Should Have Only Flip Phone, Website Whitelist, DOJ Says, With Congress Impotent, Courts Are the Only Option for Fighting SEC Overreach, Silvergate Closes SEN Platform Institutions Used to Move Money to Crypto Exchanges, Binance.US Is Operating 'Unregistered Securities Exchange,' SEC Official Says, About half of Tethers roughly $75 billion in assets, Tether (the company) said back in September. The information on this website is subject to change without notice. For Ardoino and the team, this highlights the crypto community's faith in Tether. A stock exchange filing added that Evergrande was added to a watch list for possible further downgrades in the future. Before falling into a major crisis, Chinese property developers had issued commercial paper worth 3.6 trillion yuan ($556 billion) in 202020% higher from 2019. The New York attorney-generals office declined to comment on whether Tethers disclosure, which came in the form of a single-page PDF, was sufficient to meet its requirement on reporting as part of Februarys settlement. 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. "Tether does not hold any commercial paper or other debt or securities issued by Evergrande and has never done so," the company said. The struggling real estate giant has listed $300 billion in total liabilities and says it needs to find funds quickly. New Tether Report Shows 17% Reduction in Commercial Paper 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. Investors aren't only looking at audits, there's also regulation. It goes something like this: About half of all bitcoin trades against stablecoin tether (USDT), according to data from CryptoCompare. Stablecoin Tether says holds no Evergrande commercial paper - Yahoo! According to a spokesperson from Tether, Tether does not hold any commercial paper or other debt or securities issued by Evergrande and has never done so. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. 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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. 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. Is the Evergrande crisis pushing Bitcoin, Tether markets on - AMBCrypto In those two years, bitcoins market cap has gone up eight times, from $159 billion to $1.3 trillion. Given Tethers record to this point, that may take a while. Hit him up! The Evergrande Group is the second-largest property developer in China by sales. The value of loans backing Tether's stablecoin reserves could be a risk factor for the crypto industry. 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. Evergrande is a major property developer in China, and beyond real estate, it has multiple other business units operating in industries such as health-care services and electric vehicles. This type of debt financing is back in the limelight as China's second largest property developer Evergrande teeters on the brink of default. Tether said that it funnelled roughly half its reserves into commercial paper. Questions for Cramer? What should a secular society really look like? Tether is the third-largest cryptocurrency by market value, trailing only ether and bitcoin, which are second and first, respectively. The $1.1tn commercial paper market is vital for large companies looking to raise cash for short-term needs such as payroll and inventories. Well, think of a detective in a movie who takes a corkboard, some photos and a lot of white strings to put all the parts of a story together. But this is not just about one company: Even if Tether doesnt specifically hold any of Evergrandes short-term debt, it could have huge exposure in the form of other Chinese obligations. 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. Debate swirls about whether that impact would spread beyond China, but theres broad agreement that impact within the country would be near catastrophic. Your weekly wrap of Web3 news and trends. Tether has been beset by transparency concerns in the past as well. Who to fire? But these are the same rating agencies that are rating the US Treasuries," Ardoino said. The report investigated the quality of assets backing USDT, and alleged the debt assets supporting Tether dollar reserves may of questionable nature. Evergrande, China's second-largest property developer, is to blame. The biggest crypto news and ideas of the day. Elon Musks Twitter is dying a slow and tedious death. It has tried to quell the heightened concerns expressed by mainstream financial media regarding its dollar reserves. Stablecoin Tether says holds no Evergrande commercial paper These frauds even show some sign of being tacitly approved by the Chinese government, to the extent that they have targeted investors abroad. A theory that Tether has been buying Evergrande commercial paper and ", 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. 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. Tethers previous public attestations include various short-term deposits and commercial paper kept as reserves to back the USDT stablecoin. Your Use of the Site. What financial advisors need to know about crypto. Bitcoin and other cryptocurrencies were crashing Monday amid a global selloff in risk assets. Evergrande has now had to suspend trading of that units onshore corporate bonds following a downgrade, another red flag pointing towards an impending default. Tether grants you a limited license to access and make personal use of the Site. Stanley will arrange a new seating arrangement sporadically. The most recent attestation states the average credit rating of its commercial paper holdings is "A-1" - an. Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28. Stablecoin Tether says it does not hold any commercial paper from Evergrande in recent a statement. Tether's Paolo Ardoino on Reserves, Regulation and Evergrande As one of the first stablecoins, Tether's experienced its fair share of controversies, particularly surrounding the reserves that back its eponymous coin. Crypto markets took a dip Thursday just around the time it was reported that Chinas Evergrande Group was on the verge of defaulting on a bond payment. According to the Financial Times, this makes Tether one of the world's largest investors in the US commercial paper market. and other data for a number of reasons, such as keeping FT Sites reliable and secure, However that's not stopped its popularity. Disclosures from cryptocurrency provider Tether suggest it has become one of the worlds largest investors in the US commercial paper market, rubbing shoulders with the likes of fund managers Vanguard and BlackRock and dwarfing the investments of tech giants like Google and Apple, according to estimates from JPMorgan. Evergrande is a major property developer in China, and beyond real estate, it has multiple other business units operating in industries such as health-care services and electric vehicles. The biggest crypto news and ideas of the day. While the embattled housing giant ultimately made its scheduled payment of $148 million, questions persist about the long-term prospects for it and other real estate developers in China. The tumble appears to have been triggered by the mounting problems at embattled property giant China. That should refute anyone who could try to argue USDT may have fueled Chinas boom in commercial paper. Evergrande is the biggest issuer of commercial papers. Since Evergrande's potential collapse could have broad implications for the commercial paper market and Tether's most recent attestation contains no breakdown of either the geographical exposure or investment category of the paper it holds, market participants are concerned about the risks to Tether's books. Stablecoin Tether says holds no Evergrande commercial paper Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. See here for a complete list of exchanges and delays. After a couple of decades of relative freedom for entrepreneurs (including, as mentioned, the apparent freedom to commit securities fraud), Chinese leadership under Xi Jinping has begun to aggressively intervene in markets. Today, Bloomberg BusinessWeek reported that stablecoin issuer Tether owns billions of dollars worth of commercial paper issued by large Chinese firms and that it may be using these assets to back up its stablecoin reserves. Decentral Media, Inc. is not an investment advisor. But these have frequently raised more questions than answers. Tether operates a so-called stablecoin, which it says is backed one-for-one by dollar assets. 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. He also shares his expectations on stablecoin regulation and competition. China Evergrande Group Flashes Default Warnings, Tether Says We Don't As we have indicated in our published statements and in our most recent assurance attestation with a reporting date of June 30, 2021, the vast majority of the commercial paper held by Tether is in . As part of that settlement, Tether received a $18.5 million fine, agreed to no longer operate in New York and pledged to provide quarterly reports on its reserves for the next two years. The vast majority of the commercial paper held by Tether is in A-2 and above rated issuers.. Weve got lots of inquiries and heard lots of discussion, but have not seen any active participation, said Deborah Cunningham at Federated Hermes.Until last week we hadnt really heard of them, said a trader at a large bank. Evergrande and China's Looming Risk to Tether - CoinDesk "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.". Money Reimagined The transformation of value in the digital age. Sign up for free newsletters and get more CNBC delivered to your inbox. There is a chance that were currently staring down the barrel of the next financial meltdown.. In February, the operator and the related trading platform Bitfinex pledged to offer more transparency on its reserves under the terms of an $18.5m settlement with the New York attorney-generals office, leading to the most recent disclosures last month. "Tether has maintained its stability . But it could still take Tether with it, depending on whats actually in that stablecoin sandwich. A week after its stablecoin briefly lost its 1:1 peg with the U.S. Dollar, Tether's Q1 2022 assurance report shows it has reduced the commercial paper in its USDT reserves by 16.8%.. As of March 31, Tether 's $82 billion reserves were 86% cash and cash equivalents, the rest includes $4 billion in corporate bonds, $3 billion secured loans, and $5 billion other investments like cryptocurrencies . Tether reserves the right to change these Terms at any time without notice, and such changed Terms will take effect once we post them at the Site. Tether grants you a limited license to access and make personal use of the Site. 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. Stablecoin Tether says holds no Evergrande commercial paper We are completely confident.". Approximately half of Tethers $62.8 billion assets as of the end of June 2021, were backed by commercial paper and certificates of deposit, according to the company. Evergrande has now had to suspend trading of. That marks a significant decrease in commercial paper, from $24 billion to $20 billion in the first quarter of 2022. Well send you a myFT Daily Digest email rounding up the latest Cryptocurrencies news every morning. Ardoino clarified that Tether does not hold Evergrande's commercial paper. He takes the lead in the majority of the company's communications, while the CEO and CFO stay firmly in the background. "Tether said they have no Evergrande exposure," Cramer acknowledged. This stability means they offer an accessible - if boring - entry and exit point to the crypto world. Stablecoin Tether clarified that while they do hold commercial paper, none of it is from Evergrande. The downgrade notice was sent to Evergrande on Sept. 15 from China Chengxin International. Evergrande has failed to execute on the promises backing its roughly $300 billion in debt, particularly in housing. Probing the intersection of crypto and government. Another 18 per cent is held in fiduciary deposits, more than 12 per cent in secured loans and nearly 10 per cent in corporate bonds, funds and precious metals. The downgrade notice was sent to Evergrande on Sept. 15 from China Chengxin International. promo How much of it is Chinese or specifically from Evergrande is unclear. You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. recently accused of violating securities laws. Ardoino wouldn't comment on whether the Treasury directly spoke to Tether for the report. Tether said that it funnelled roughly half its reserves into commercial paper. But the relatively staid coins are making up a growing proportion of the overall market, with a value of around $127 billion. Tether, Bitcoin and Chinese Commercial Paper at Scale - CoinDesk 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. 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. Something weird happened today in crypto-world. Markets cant function without transparent information flows, full stop. var plc588602 = window.plc588602 || 0; (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. In fact, $30 billion of the Tethers dollar holdings are invested in commercial paper, which makes one of the largest holders of this debt asset class and puts the firm ahead of some top financial firms. "I think that it's a little bit aggressive, or cocky, to ask that everyone in the world use US agencies, or US auditing companies - otherwise it does not matter, or is not fine," he said. The latest moves in crypto markets, in context. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. See here for a complete list of exchanges and delays. 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. At the same time, hot topics such as regulation, competition and the Evergrande debt crisis are shining a spotlight on that "old information".