Tether Says It Liquidated BTC Loan For Crypto Lender Celsius

Tether says it liquidated BTC loan for the crypto lender Celsius and it minimized the impact on the market so let’s read more in our latest Tether news.

Tether announced today that it liquidated the loan to the crypto lending company Celsius. The stablecoin issuer didn’t specify the dollar value of the loan but said that it managed to settle up with the crypto lender without having to incur any losses. The company’s announcement reads:

“This process was carried out in a way to minimize as much as possible any impact on the markets and in fact, once the loan was covered, Tether returned the remaining part to Celsius as per its agreement. Celsius position has been liquidated with no losses to Tether.”

Tether says it liquidated a loan that essentially minimized the market impact. Celsius ran into trouble last month when it tried to pause the customer withdrawals from the platform and stabilize the liquidity which took out the overcollateralized loan from Tether denominated in BTC. Tether said that it had no exposure to Celsius apart from the investment made out of Tether equity for the company. Tether is the company behind USDT stablecoin which is also the most traded cryptocurrency and the backbone of the economy. Stablecoins are pegged to the US dollar and are very important for the traders because they are used to entering and exiting the trades for other assets without the need to access USD.

Rumors circulated that a chunk of the Tether commercial paper portfolio which along with other assets in the reserves is 85% backed by Asian commercial papers and was traded at a discount of 30%. Tether denied this and said the rumors were fabricated to induce more panic and generate more profits from the stressed market. The state of the Tether reserves was a hot topic for some time now and USDT is supposed to be backed by the US dollars or their equivalent but in the past, critics and regulators questioned what was really in the Tether reserves.

The exposure to a failing crypto company like Celsius raised investor eyebrows in the bear market when plenty of platforms struggled to keep their heads above water. Celsius handled $10 billion in customer assets at one point and mismanaged how it ran the lending platform, executing high-risk leveraged trading strategies and lost $350 million in customer funds. Tether tried to reassure the clients and said that he had no exposure to Celsius other than the loan and that it never will put the integrity of the reserves at risk.