Adam Cochran, an experienced fintech executive, and crypto investor, shared a positive outlook on the leading crypto asset USDT (Tether), despite the risks the stablecoin poses. The investor, reflecting back on 2021’s allegations on Tether, the investor commented that what matters is the willingness of the traders to take up the risks.
In a recent tweet, Cochran unveiled the previous allegations on Tether published in Bloomberg:
1/12
— Adam Cochran (adamscochran.eth) (@adamscochran) June 16, 2023
Tether backing breakdown from Bloomberg based on the '21 docs:
-Included extensive amounts of Chinese Paper (basically short term loans to Chinese companies)
-Included a "sizeable loan" to Celsius Network. pic.twitter.com/GbOQDE50CI
A recent Bloomberg report revealed Tether’s previous financial activities and connections, claiming:
Tether’s reserves did in fact include billions of dollars of short-term loans to Chinese companies, as well as a sizable loan to crypto platform Celsius Network. At the time, Tether denied having any exposure to the crisis-hit China Evergrande Group’s debt but declined to say whether it held securities of other Chinese companies or issuers.
Cochran, sharing screenshots of the Bloomberg report, commented that the exchange had extensive third-party loans and banking partners in the Bahamas. Summarizing the report, he pointed out the overall understanding of the matter.
As per Cochran’s precis, Tether had “exposure to private loan collateral for BTC and ETH covering up to 20% of USDT rather than just 1:1”. In addition, he notified that the platform had “high exposure to Chinese commercial paper during shaky times”, along with its connections with third-rate banks.
However, Cochran shared a positive outlook on the stablecoin, asserting:
It’s important to remember that no risk is 0$ or 100% it’s somewhere in between. Just like no stablecoin is perfectly $1 when you factor in risk – it’s all about which risks you and the market are willing to take. Chinese paper and Bahamian banks aren’t on mine.
He added that though the platform has decreased its exposure to commercial paper and virtual assets, and improved banking partnerships, it would be less likely to think of Tether as “perfect safe 1:1 in reliable assets”.
