While Tether (the company) said back in September it doesn't hold Evergrande commercial paper, about a month ago Bloomberg BusinessWeek reported Tether's holdings included "billions of. He takes the lead in the majority of the company's communications, while the CEO and CFO stay firmly in the background. Tethers previous public attestations include various short-term deposits and commercial paper kept as reserves to back the USDT stablecoin. Tether is a typical design firm that will value the client's needs over their employees. In response to the Bloomberg BW report, it released a blog post claiming that the report is spreading misinformation.. Tether is completely unbacked USD that gives these exchanges the liquidity they need to market make derivatives that have non-linear . "There is an entire world outside of the US," Ardoino said. Tether grants you a limited license to access and make personal use of the Site. var rnd = window.rnd || Math.floor(Math.random()*10e6); As demand for tether grew, market participants started to question whether that was the case. According to documents received byBloomberg BusinessWeek, Tether has extended billions of dollars in loans to large Chinese companies. He holds Bitcoin, Ethereum, and small amounts of other crypto assets. 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. 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. Be a smarter, safer investor in eight weeks. "Tether does not hold any commercial paper or other debt or securities issued by Evergrande and has never done so," the company said. Evergrande is trying to find a way to cut costs and sell off some of its assets to dig its way out. The company also denied holding any Evergrande debt and claims to hold only commercial paper issued by A-2 and above-rated companies, which it claims to be risk-free. Evergrande, China's second-largest property developer, is to blame. Such holdings of companies short-term debt would make it the seventh largest in the 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. News and analysis for the professional investor. CNBC's Jim Cramer urged investors who have gains in their cryptocurrency portfolios to take some profits, saying Monday he believes digital currencies are likely to face more weakness related to struggling Chinese property developer Evergrande. Cramer has a position in ether, which runs on the Ethereum blockchain. The enshittification of apps is real. The downgrade from A to AA applies both to the bonds and their issuer rating. Well send you a myFT Daily Digest email rounding up the latest Cryptocurrencies news every morning. This type of debt financing is back in the limelight as China's second largest property developer Evergrande teeters on the brink of default. (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 total, Tether holds 52% US Treasury bonds, 37% commercial paper, with the remainder in cash and money market funds. Tether is the third-largest cryptocurrency by market value, trailing only ether and bitcoin, which are second and first, respectively. This comes as the Evergrande debt crisis and rival stablecoins shine a spotlight on Tether's reserves again. What should a secular society really look like? Mad Money Twitter - Jim Cramer Twitter - Facebook - Instagram, Questions, comments, suggestions for the "Mad Money" website? We want to hear from you. 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. 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. A stock exchange filing added that Evergrande was added to a watch list for possible further downgrades in the future. ", 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. promo "In the end, this industry is more than $2 trillion and it's important to have clear guidelines and clear rules and so on. 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. Lab leak theory: 3 years on, will we ever know where COVID came from? "Don't let it become a loss. "The case is you have two choices, you trust the rating agencies, or you don't trust them. In addition to being a major real estate developer, Evergrande is also China's largest issuer of commercial paper (very short-term corporate bonds). These frauds even show some sign of being tacitly approved by the Chinese government, to the extent that they have targeted investors abroad. But is it bad? The developer on Thursday applied to suspend trading of that unit's. Tether said that it funnelled roughly half its reserves into commercial paper. analyse how our Sites are used. "Tether said they have no Evergrande exposure," Cramer acknowledged. That type of heavy-handed control is at the core of Chinas conundrum as an authoritarian state trying to reap the rewards of capitalism. Krypto. Evergrande's main unit had 205.7 billion yuan ($32 billion) worth of commercial paper at the end of 2020, filings show. Your weekly wrap of Web3 news and trends. Its flagship unit, Evergrande Real Estate Group, had 205.7 billion yuan ($32 billion) worth of commercial paper at the end of 2020,. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. It earned this title after the Chinese government banned the company from issuing longer-term debt. The stablecoin issuer Tether this week declared that it doesnt hold short-term debt issued by troubled Chinese real estate developer Evergrande. 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. 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. But since it's unsecured, there is also very little recourse for investors if an issuer does default. Understanding the magnitude of size and growth of USDT, bitcoin and Chinese commercial paper may help give some perspective to the latest headlines. The downgrade from A to AA applies both to the bonds and their issuer rating. By signing up, you will receive emails about CoinDesk products and you agree to ourterms & conditionsandprivacy policy. Tether has faced scrutiny from authorities and investigators in the past. Probing the intersection of crypto and government. USDT is designed to be pegged to U.S. dollar at a 1:1 ratio, thereby making it possible to trade crypto assets without relying on traditional banking services by providing a stable unit of account. The stablecoin issuer says its goal is to reduce its commercial paper holdings to zero. We do not give personalized investment advice or other financial advice. Evergrande's main unit had 205.7 billion yuan ($32 billion) worth of commercial paper at the end of 2020, filings show. Evergrande has failed to execute on the promises backing its roughly $300 billion in debt, particularly in housing. 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. A Bloomberg report has claimed to have found that Tether holds billions of dollars worth of Chinese commercial paper. The most recent attestation states the average credit rating of its commercial paper holdings is "A-1" - an investment grade based on the ratings scale of Moody's Investor Services, a ratings agency. Sign up for Crypto for Advisors, our weekly newsletter defining crypto, digital assets and the future of finance. But Stuart Hoegner, Tethers general counsel, said: With respect to reputation, we believe we are seeing the opposite: more and more counterparties are comfortable with Tether and our transparency initiatives and are keen to work with us.. Kryptowhrungsunterricht/E-Book-Download. How Ethereum's evolution impacts crypto markets. "So if A1 commercial paper rated by a US Agency is considered safe [then] why is where the issuer located matters?". Can it be liquidated to meet redemptions? 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. "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. 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 . 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. In the NYAG investigation, the company was found to be conducting illegal activities in New York. "An industry is not an industry if there is only one player, instead having many players with different offerings with different use cases is really helpful in a moment when you have to talk with the regulator," Ardoino said. It goes something like this: About half of all bitcoin trades against stablecoin tether (USDT), according to data from CryptoCompare. In a series of tweets about the Evergrande news, partner at Cinnemhian Ventures Adam Cochran, said that IF either Tether or USDC did meltdown in a global collapse though, itd actually be bullish for crypto, as if you couldnt use them to cash out, people would just start bulk converting them into BTC/ETH regardless of price., Cochran added that, despite not being a well-known name in the West, the failure of Evergrande could have massive fallout. However that's not stopped its popularity. Which countries in the EU are buying the most electric cars? 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. But this reported accumulation has largely gone unnoticed on Wall Street, according to several of the biggest players in the market including bank traders, analysts and money market funds. The biggest crypto news and ideas of the day. Critics say it's not enough. recently accused of violating securities laws. 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. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information. Regardless of what commercial paper you hold, bonds and commercial paper would take a hit and some issuers may even fold," tweeted Adam Cochran, partner at Cinneamhain Ventures. That should refute anyone who could try to argue USDT may have fueled Chinas boom in commercial paper. A report from the end of 2020 shows that Evergrande has just around 10% of the money owed. All Rights Reserved. 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. The information on this website is subject to change without notice. clarified that Tether does not hold Evergrande's commercial paper. Stablecoins are cryptocurrencies that are pegged to fiat currency on a one-to-one basis. var abkw = window.abkw || ''; read more. Hit him up! Join our Telegram Group and get trading signals, a free trading course and daily communication with crypto fans! But these are the same rating agencies that are rating the US Treasuries," Ardoino said. 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. Evergrande is just the latest major Chinese firm to have serious problems due to apparent fraud or mismanagement. I think one time, Stanley mentioned when he saw employees on downtime he . Sign up for The Node, our daily newsletter bringing you the biggest crypto news and ideas. At the end of 2020, it had $32 billion worth of commercial paper. Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28. The transformation of value in the digital age. Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28. 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. "We are always working with regulators and we are expecting additional or proper regulations coming in the next few months, to one year," Ardoino said. Given Tethers record to this point, that may take a while. 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. Commercial paper typically has low default rates. We use The developers debt is spread across an army of banks and other financial institutions, leading some analysts to worry that its collapse would have systemic impacts comparable to the fall of Lehman Brothers, which kicked off the Great Recession 13 years ago. The $1.1tn commercial paper market is vital for large companies looking to raise cash for short-term needs such as payroll and inventories. 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. Sell some, stay long the rest, then let's wait and see if China changes its attitude toward an Evergrande bailout.". Sign up for notifications from Insider! Analysis: Goldman Sachs faces hard sell for its consumer assets, Ex-Goldman banker Ng deserves 15 years in prison, US prosecutors say, Reporting by Alun John The. Or perhaps there are other ways to explain things. Holiday events will take place, but it is silently frowned upon to join in. CoinDesk journalists are not allowed to purchase stock outright in DCG. This article is excerpted from The Node, CoinDesks daily roundup of the most pivotal stories in blockchain and crypto news. The Evergrande Group is the second-largest property developer in China by sales. A government bailout is also a possibility. The transformation of value in the digital age.
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