Tether says it liquidated Celsius loan at no loss

By:
on Jul 8, 2022
  • Tether says the loan investment had ‘no correlation’ to USDT reserves.
  • The stablecoin issuer covered the loan and ‘returned’ the rest to Celsius.
  • Celsius has not resumed customer transactions since mid-June.

Tether, the issuer of the world’s largest stablecoin USDT, has reportedly liquidated the loan advanced to struggling crypto lender Celsius.

According to the firm, its liquidation of the overcollateralized loan did not result in any losses on its part, and that the loan was indeed a very small portion of its shareholder equity.

Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.

In the announcement published on Friday, Tether maintained it does not have any investment in Celsius. Also, the small loan had no correlation with the USDT reserves or Tether’s stability.

Celsius reconfirmed liquidation terms

Tether, whose revelation of the liquidation comes on the back of heightened negativity around struggling crypto firms, said Celsius “reconfirmed” the terms under which the loan was to be liquidated before Tether took that step.

The Tether loan that was taken out by Celsius was an overcollateralized loan denominated in BTC (130%+), and the decision to liquidate the collateral to cover the loan was a part of the original terms of the agreement between the two entities,” the stablecoin issuer wrote.

Accordingly, Celsius “reconfirmed in writing before the start of the liquidation event.”

Tether only covered its loan and returned the remaining amount to the beleaguered firm. Although it did not state exactly when the process was undertaken, Tether noted all was at almost no impact to the markets.

Invest in crypto, stocks, ETFs & more in minutes with our preferred broker, eToro
10/10
68% of retail CFD accounts lose money