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Bloomberg reports Tether may have used Chinese commercial paper as reserves, community response is indifferent, CEO Van der Populier's Twitter account appears to have been deleted

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Bloomberg reports Tether may have used Chinese commercial paper as reserves, community response is indifferent, CEO Van der Populier

In recent months, Bloomberg has reported several negative news about Tether. Today on October 8th, Bloomberg once again pointed out that Tether holds billions of dollars worth of Chinese commercial paper. In response, Tether officials have issued a statement refuting the claims. However, strangely, CEO Zhuo Jenz's Twitter account was deleted today.

China Business Notes Suspicion

A report by Bloomberg written by journalist Zeke Faux alleges that the stablecoin USDT issuer Tether holds billions of dollars in commercial paper issued by Chinese companies as reserve assets for USDT.

Zeke Faux stated that he has been tracking the cash flow of Tether since the beginning of this year, with the cash flow moving from Taiwan to Puerto Rico, the French Riviera, China, and the Bahamas. He quoted bankers who work with Tether:

Tether executives continue to make hundreds of millions in profit from reserves. It is not a stablecoin but a high-risk offshore hedge fund. Even banking partners do not know how much reserve they hold or if there are reserves.

Zeke Faux raised the following suspicions:

1. LinkedIn lists only 12 employees, which does not match the company's management size of $69 billion in assets. It was found to be 29 people.

2. With $30 billion invested in commercial paper, Tether is the seventh-largest holder of such debt, similar in scale to JPMorgan Chase & Co., Charles Schwab Corporation, and Vanguard Group.

Source: Tether Reserves Report

3. Tether is composed of entities in the British Virgin Islands and Hong Kong, claiming to be registered with the Financial Investigation Bureau of the British Virgin Islands. However, Zeke Faux pointed out that the bureau director Errol George stated via email:

We do not regulate Tether, never have.

4. Tether's CFO Giancarlo Devasini, who was a plastic surgeon in his early career, was revealed by the Financial Times to have paid $65,000 to Microsoft in 1996 to settle a false claim.

5. Zeke Faux claims to have received detailed accounts of Tether's reserves, including providing billions of dollars in short-term loans to Chinese companies and about a billion dollars in loans to Celsius Network.

Zeke Faux emphasized that before the Evergrande event in China, money market funds had avoided such short-term loans. The founder of Celsius Network stated that he paid 5-6% interest for the $1 billion USDT.

Tether's Response

As most of the accusations are known events, and Bloomberg failed to provide evidence for the explosive points in points three and five, not even screenshots, and given Bloomberg's previous similar reports have not caused a ripple in the market, the lack of evidence has led to both positive responses and criticisms of Tether.

Tether responded with a statement:

The report has appeared multiple times in the crypto industry, collecting one-sided old news and quoting dubious sources to conform to the original position and statement, and defaming the CFO and Tether executives with extremely unreliable sources. The fact is that all USDTs have 100% reserves, and the vast majority of commercial paper is issued by companies rated A-2 and above.

The crypto market mostly scoffed at the report, with analyst cobie claiming he would rather hold USDT than legal US dollars. Blockstream's CSO Samson Mow also shared a screenshot of Tether's reserves to mock Bloomberg's description of the mysterious transparency of reserves.

However, mysteriously, a Twitter account suspected to be that of Tether's CEO Jean-Louis Van der Velde was deleted today, with the last tweet dated 10/4, where he hinted at a financially struggling magazine releasing negative news about Tether to make a few more pennies to prolong its struggling days.

In fact, Bloomberg's multiple reports have failed to provide conclusive evidence to bring down Tether, and Tether naturally can vehemently refute without sufficient evidence from the other side. However, Tether has yet to undergo a comprehensive audit to prove the transparency of its reserves, and it is expected that the drama between the two parties will continue to unfold.