The stablecoin issuer has once again explained that its investment in Celsius has no impact on its USDT reserves.
Tether’s Bitcoin (BTC)-denominated
loan to Celsius Network has been fully liquidated without a loss,
easing concerns that the stablecoin issuer may have oversized exposure
to the embattled crypto lender.
In a statement issued Friday, Tether explained
that its lending arrangement with Celsius prevented any downside risk
to its underlying business. Specifically, the BTC-denominated loan
issued to Celsius was overcollateralized by 130%, and the original
agreement allowed Tether to liquidate the collateral to cover the loan.
“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,” the
statement read. “Celsius position has been liquidated with no losses to
Tether.”
Rumors of Celsius’ insolvency began circulating last month after the crypto lender was forced to halt withdrawals due to “extreme market conditions.” Details of massive losses and liquidity constraints soon trickled in as the firm hired new legal counsel to advise on restructuring.
Related: Celsius pays down 143M in DAI loans since July 1
With the crisis unfolding in June, Tether issued a statement explaining that its portfolio investments in Celsius had nothing to do with the health and backing of USDT, the world’s largest stablecoin by market capitalization.
“While
Tether’s investment portfolio does include an investment in the
company, representing a minimal part of our shareholders' equity, there
is no correlation between this investment and our own reserves or
stability,” the company said on June 13. The same message was relayed verbatim in Tether’s Friday statement.
USDT
is the most widely used stablecoin on the market but its dominance has
declined over the past year. Currently, USDT has a total market cap of
$66 billion, according to CoinMarketCap. Circle's USD Coin (USDC) comes in at a close second with $55.5 billion in capitalization.
source link : https://cointelegraph.com/news/tether-liquidates-celsius-position-with-no-losses-to-stablecoin-issuer
