Controversy Erupts As Tether’s CTO Challenges WSJ Report on Loan Exposure

Key Points:

• Tether’s CTO, Paolo Ardoino, criticized a recent Wall Street Journal report on the company’s USDT-denominated secured loans.
• The company’s financial statement revealed an increase in secured loans, contrary to their earlier commitment to reduce loan exposure to zero by 2023.
• Gabor Gurbacs, a director at VanEck, supported Ardoino’s comments and emphasized the need for responsible journalism.

Tether’s Chief Technology Officer, Paolo Ardoino, has criticized a recent Wall Street Journal (WSJ) report that discussed the company’s USDT-denominated secured loans.

Tether’s CTO Challenges WSJ Report on Loan Claims in 2023

The report included a comment from an individual described as a company official, explaining the circumstances surrounding the issuance of these loans in the second quarter of the current year. However, Ardoino contested the accuracy of the report, stating that the person cited in the WSJ article was neither a Tether spokesperson nor employed by Tether.

In response to the WSJ’s allegations, Ardoino remarked, “Pure bullies. Not unexpected from them though.” He also took a swipe at Bloomberg, suggesting that their articles were based on unconfirmed information.

The Company’s Loan Commitment Under Scrutiny Amidst Growing Controversy

The controversy stems from Tether‘s financial statement, which indicated an increase in the issuance of USDT-denominated loans, contrary to their earlier commitment to reduce loan exposure to zero by 2023. Tether had previously outlined a plan to decrease exposure to secured loans following concerns in December 2022. However, the latest quarterly report showed a slight increase in secured loans in 2023 compared to the same period in 2022.

Ardoino further clarified that the WSJ report had misquoted Alex Welch, who was initially identified as a Tether employee but was, in fact, not associated with the company. Welch had cited “few short-term loan requests from clients” as the reason for the rise in secured loans.

Gabor Gurbacs, Director at VanEck, an investment management firm, supported Ardoino’s comments and urged journalists to read independent Tether attestation reports for a better understanding of secured loans. He emphasized that these loans were fully collateralized and over-collateralized by liquid assets, as per the attestation reports, and called for more responsible journalism and verification of sources in the industry.

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