The company behind USDT, the largest algorithm stablecoin by market cap, Tether has disclosed Celsius loan liquidation without incurring any loss in the process.
Tether did not disclose the dollar value of the BTC loan but says it has managed to settle up the embattled cryptocurrency lender with no loss.
According to a statement by the company, “this process was carried out in a way to minimise 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.”
Troubled Celsius, last month announced that it is freezing every form of withdrawal, transfer, and deposit on its platform to prevent running out of liquidation, took out a BTC-dominated overcollateralized loan from Tether.
Meanwhile, Tether said it had “zero exposure to Celsius apart from a small investment made out of Tether equity in the company.”
Tether’s USDT is the most traded stablecoin in the crypto space, it is a stablecoin tied to the US dollar, and a safe space for traders whenever they want to exit any trades. Visit MyCryptoParadise blog for more information on stablecoins.
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Meanwhile, in June, there were rumors that a part of Tether’s commercial paper portfolio, which along with other assets backed its reserves, is “85% backed by Chinese or Asian commercial papers and being traded at a 30% discount.”
Tether in response to the rumors said it’s fabricated to “induce further panic in order to generate additional profits from an already stressed market.”
For some time, the situation of Tether reserves has been a topic of discussion in the crypto space, as generally known, US dollars or their equivalent should actually back Tether’s USDT, but for some time now, critics and regulators have been questioning what is really held in Tether’s reserves.
Exposure to crypto companies who are currently insolvent would further raise investors’ eyebrows, especially during a bear market when several crypto firms are struggling to survive.
In a report by Arkham Intelligence, Celsius at one point handled $10 billion in clients’ assets, mishandled how it ran its lending platform and executed “high-risk leveraged crypto trading strategies,” only to lose $350 million in customer funds.
Tether again has reassured its customers and declared that it has no exposure to Celsius apart from the loan and that it “has never and will never put the integrity of its reserves at risk.”
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