Or perhaps there are other ways to explain things. The downgrade notice was sent to Evergrande on Sept. 15 from China Chengxin International. 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. Evergrande's main unit had 205.7 billion yuan ($32 billion) worth of commercial paper at the end of 2020, filings show. It is also alleged that Tether also owns commercial paper issued by Evergrande, Chinas second-largest real estate developer, which is itself experiencing a major liquidity crisis. Thus, it has grown 19-fold in a matter of two dozen months. "I know the crypto-lovers never want to hear me say sell, but if you've got a big gain as I did, well, I'm begging you to," the "Mad Money" host said. read more. 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 information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. The stablecoin issuer says its goal is to reduce its commercial paper holdings to zero. Evergrande has failed to execute on the promises backing its roughly $300 billion in debt, particularly in housing. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information. Its flagship unit, Evergrande Real Estate Group, had 205.7 billion yuan ($32 billion) worth of commercial paper at the end of 2020,. Tether said that it funnelled roughly half its reserves into commercial paper. 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. 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. What does one have to do with the other? "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. Siddharth Venkataramakrishnan and Joe Rennison. Tether has revealed that its commercial paper holdings would be $3.5 billion by July 31. Be a smarter, safer investor in eight weeks. He is also now CTO of cryptocurrency exchange Bitfinex. Another 18 per cent is held in fiduciary deposits, more than 12 per cent in secured loans and nearly 10 per cent. 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. 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. Data is a real-time snapshot *Data is delayed at least 15 minutes. 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. Crypto Long &. Evergrande, Chinas second-largest property developer by sales, recently warned that it was in danger of defaulting on massive debts. 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. 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. 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. Stablecoin Tether says it does not hold any commercial paper from Evergrande in recent a statement. Tethers defenders can say that even if one were to assume Tether spent half of every dollar it is said to have taken in over the past two years on commercial paper in China, that would be under one-fifth of new issuances and 4% of the market. "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. "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. document.write(''); Stablecoin Tether says it does not hold any commercial paper from Evergrande in recent a statement. This article is excerpted from The Node, CoinDesks daily roundup of the most pivotal stories in blockchain and crypto news. Now onto the crypto context, if you have not guess it already, Tether's USDT that tracks the value of the US dollar is backed by a significant amount of Chinese commercial paper. How much of it is Chinese or specifically from Evergrande is unclear. Tether has faced scrutiny from authorities and investigators in the past. Cramer stressed he still sees potential for cryptocurrencies to go "mainstream," but believes it's important to lock in at least some gains while they're still there. Probing the intersection of crypto and government. It earned this title after the Chinese government banned the company from issuing longer-term debt. Tether, the largest stablecoin, is a Hong-Kong based stable currency. This stability means they offer an accessible - if boring - entry and exit point to the crypto world. personalising content and ads, providing social media features and to See here for a complete list of exchanges and delays. 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. Explainer: How China Evergrande's debt troubles pose a - Reuters That marks a significant decrease in commercial paper, from $24 billion to $20 billion in the first quarter of 2022. Ardoino joined Tether back in late 2015 as a developer before being appointed chief technology officer around a year later. Probing the intersection of crypto and government. Given Tethers record to this point, that may take a while. The most recent report from accountant Moore Cayman shows more than 50% of the assets backing a tether coin were commercial paper and certificates of deposit, rather than dollars, or short-term government paper. The biggest crypto news and ideas of the day. Evergrande is just the latest major Chinese firm to have serious problems due to apparent fraud or mismanagement. But these are the same rating agencies that are rating the US Treasuries," Ardoino said. But he did lay out his timeline expectations for regulation. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. 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. The latest moves in crypto markets, in context. The report investigated the quality of assets backing USDT, and alleged the debt assets supporting Tether dollar reserves may of questionable nature. We want to hear from you. With Tether we are welcoming all that. 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. The outlet estimated that the actual figure could be even higher, since it has other units, which also issue commercial paper. However, Tether is very secretive about its holdings, only disclosing that it does hold international commercial paper. Tether Denies Holding Commercial Paper Issued by Troubled - NXTmine An additional 20% reduction is to show up on the company's Q2 report. 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. Tether's commercial paper disclosure places it among global giants Stablecoin Tether says holds no Evergrande commercial paper - Yahoo! In early 2021, Tether paid a fine of $18.5 million to settle a case with the New York Attorney General. "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. And it could offer savvy investors the opportunity to hedge against the Tether Bomb an affectionate term for the fact that nobody really From 2018 onwards, new stablecoins have been pouring onto the markets. 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. However, Tether is very secretive about its holdings, only disclosing that it does hold international commercial paper. Such holdings of companies short-term debt would make it the seventh largest in the world. The Node The biggest crypto news and ideas of the day. cookies The company has more than $300 billion in total liabilities and recently warned investors it may default on its debts. 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. 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. Smart navigation app uses 3D sound to guide blind people. This is not the first time concerns about the true value of USDT have emerged. Tether, Bitcoin and Chinese Commercial Paper at Scale - CoinDesk Please enter your email address. At the same time, hot topics such as regulation, competition and the Evergrande debt crisis are shining a spotlight on that "old information". 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. It is now the third-largest cryptocurrency by market capitalisation, according to CoinMarketCap, making up the bulk of stablecoin volume. Which countries have banned TikTok, and why? His role is much broader than tech chief. Holiday events will take place, but it is silently frowned upon to join in. According to documents received byBloomberg BusinessWeek, Tether has extended billions of dollars in loans to large Chinese companies. 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. There is a chance that were currently staring down the barrel of the next financial meltdown.. Join our Telegram Group and get trading signals, a free trading course and daily communication with crypto fans! 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. Among other signs of serious mismanagement, customers have made large deposits on Evergrande apartments that were never built. The company is currently under investigation by multiple law enforcement agencies, including the U.S. Department of Justice and the Federal Bureau of Investigation. 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. ", 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. Tether had stated since its launch in 2014 that its tokens were fully backed by US dollars in bank accounts, before pivoting in February 2019 to say that its reserves included traditional currency, cash equivalents and other assets and receivables. Questions for Cramer? 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. 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. 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. 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. Krypto. Chinese real estate developers are some of the world's biggest issuers of commercial paper. The Chinese real-estate giant is facing down $300 billion in debt that it cant pay back. They are, in theory, backed by reserves, such as short-term government bonds and the currency itself. The Evergrande Group is the second-largest property developer in China by sales. 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. While Tether (the company) said back in September it doesn't hold Evergrande 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.". Ardoino clarified that Tether does not hold Evergrande's commercial paper. But it could still take Tether with it, depending on whats actually in that stablecoin sandwich. In May, it provided a breakdown of these reserves, which Tether claims included just under $30bn in commercial paper, a short-dated investment similar to cash. Tether has amply demonstrated, most recently through assurance opinions from [auditor] Moore Cayman, that all issued tethers are, in fact, fully reserved, he added. So while Evergrande may not be on the books, the concern is that the commercial paper may be from other real estate firms. Understanding the magnitude of size and growth of USDT, bitcoin and Chinese commercial paper may help give some perspective to the latest headlines. 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 Reports 17% Decrease in Commercial Paper | Alexandria "Don't let it become a loss. A government bailout is also a possibility. JPMorgan estimates stablecoin operator would be one of the largest investors in the US market, Tethers commercial paper disclosure places it among global giants, Video: Why every Dogecoin has its day - crypto explained, Russian far-right fighter claims border stunt exposes Putins weakness, Germany seeks to buy Leopard tanks from Switzerland, Germany and Italy stall EU ban on combustion engines, Russia on alert after reconnaissance group crosses over from Ukraine, Ukraine asks EU for 250,000 artillery shells a month, Panic station at Fox News: how the Murdochs agonised over Trumps loss, UK cabbage king turns to plant-based proteins, Saudi owner of Londons most expensive house sued over alleged unpaid private jet bills, UK housing market braced for make-or-break spring, Airlines plan to sue Dutch government over Schiphol airport flight cap, There are no domestic equity investors: why companies are fleeing Londons stock market, Deluge of inflation data pushes US borrowing costs to 2007 levels, Live news updates from March 3: Amazon pauses HQ2 construction, UK regulators launch LME probe, Clutching Warrens letter, Im still positive on stocks, Fears for London market after SoftBanks Arm and building group CRH opt for New York, Joe Biden teaches the EU a lesson or two on big state dirigisme. Work - Tether The US Office of the Comptroller of the Currency has released guidance saying that banks can take deposits from stablecoin issuers only if the coins are fully backed by reserves. The information on this website is subject to change without notice. "So if A1 commercial paper rated by a US Agency is considered safe [then] why is where the issuer located matters?". var pid588602 = window.pid588602 || rnd; "Tether does not hold any commercial paper or other debt or securities issued by Evergrande and has never done so," the company said. We believe that our disclosures thus far prove that all tethers are fully backed with very useful disclosures about the nature of that backing, he added. Who to fire? Evergrande, China's second-largest property developer, is to blame. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. 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. 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. "There is an entire world outside of the US," Ardoino said. The transformation of value in the digital age. Tether is a typical design firm that will value the client's needs over their employees. Which countries have embraced a 4-day workweek and hows it going. It expanded by borrowing aggressively, including during periods when Chinas economic outlook was seen in much rosier terms globally than it is now. Tether to Cut Commercial Paper Holdings to Less Than $4 Billion 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. 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. Elon Musks Twitter is dying a slow and tedious death. He holds Bitcoin, Ethereum, and small amounts of other crypto assets. Your weekly wrap of Web3 news and trends. JPMorgans analysts said the large commercial paper holdings may suggest that Tether is struggling to find a bank willing to take its cash as a deposit. 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. Sign up for Crypto for Advisors, our weekly newsletter defining crypto, digital assets and the future of finance. Kryptowhrungsunterricht/E-Book-Download. Lab leak theory: 3 years on, will we ever know where COVID came from? 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. Evergrande was successful in raising around $8 billion by August, according to a report from Bloomberg, but it is just a drop in the pan compared to what it still owes. About half of Tether's roughly $75 billion in assets, which back USDT, is in commercial paper. Tether's USDT remains the dominant stablecoin in the market despite the FUD surrounding the coin. The struggling real estate giant has listed $300 billion in total liabilities and says it needs to find funds quickly. A theory that Tether has been buying Evergrande commercial paper and 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. ; ; Vergleich; ; ; ; Evergrande, Chinas second-largest property developer by sales, recently warned that it was in danger of defaulting on massive debts. and other data for a number of reasons, such as keeping FT Sites reliable and secure, USDT might get blown up by Evergrande and you should know - Publish0x 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. You can subscribe to get the full newsletter here. We do not give personalized investment advice or other financial advice. Those questions can only be answered with a little more transparency from the stablecoins issuer. He also shares his expectations on stablecoin regulation and competition. As we have indicated in our published statements and 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 A-2 and above rated issuers.. 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 . China Evergrande Group Flashes Default Warnings, Tether Says We Don't Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28. Tether grants you a limited license to access and make personal use of the Site. Tether Denies Holding Commercial Paper Issued by Troubled Real Estate He also said that Tether did not hold any commercial paper issued by cryptocurrency exchanges or affiliated entities. That type of heavy-handed control is at the core of Chinas conundrum as an authoritarian state trying to reap the rewards of capitalism. Evergrande is trying to find a way to cut costs and sell off some of its assets to dig its way out. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. Evergrande's main unit had 205.7 billion yuan ($32 billion) worth of commercial paper at the end of 2020, filings show. We are completely confident.". Last March, the Federal Reserve stepped in to buy commercial paper as the pandemic led money market funds, one of the biggest buyers, to pull back. 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. 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.