Tether Liquidates Crypto Used As Collateral by Controversial Digital Asset Lending Project
Stablecoin issuer Tether (USDT) says it has liquidated assets used as collateral by beleaguered crypto lending platform Celsius Network (CEL).
Tether notes in a new announcement that its portfolio includes an investment in Celsius “representing a minimal part of its shareholders’ equity.”
Tether highlights that the investment in Celsius has no correlation to USDT’s reserves or stability.
The company also says that it has liquidated the collateral of a loan to Celsius.
“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 and reconfirmed in writing before the start of the liquidation event. 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.”
On June 13th, Celsius announced the halting of withdrawals and transfers due to extreme volatility in the crypto markets.
The firm said it made the decision “in order to stabilize liquidity and operations while we take steps to preserve and protect assets.”
CEL subsequently crashed more than 99% from its all-time high to a low of $0.15. It has since rebounded to $0.76 at time of writing, though it still remains down more than 90% from its all-time high.
During the initial CEL crash last month, Tether fought rumors that the company’s Celsius investment would impact USDT’s reserves or stability.
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Author: Daily Hodl Staff
