According to the statement, Tether’s lending activity with Celsius has “always been overcollateralized” as with any other borrower and “has no impact” on the company’s reserves.
The announcement also described the ongoing issues with Celsius as an “unfortunate result of market volatility and extreme market conditions.”
The Tether company is the issuer of the Tether (USDT), the largest stablecoin pegged to the United States dollar based on 1:1 ratio. At the time of writing, USDT’s market capitalization amounts to $72 billion, significantly exceeding the market value of its major competitor, the Circle-backed USD coin (USDC).
Tether is also known as an early investor in Celsius, contributing $10 million in equity investment to the lending platform in 2020. The latest statement from Tether stressed that the company’s investments in Celsius have nothing to do with Tether
“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 day before the collapse, Celsius CEO Mashinsky took to Twitter to claim that rumors of users being unable to withdraw funds were “FUD and misinformation.” He also wrote that he had many enemies because he was winning.
The Bitcoin community has subsequently expressed skepticism over events at Celsius, with some industry observers suggesting that the Celsius network could “collapse and take a bunch of customer money with it.”
- ^ USDT (cointelegraph.com)
- ^ issued (tether.to)
- ^ Celsius halting withdrawals (cointelegraph.com)
- ^ amounts (www.coingecko.com)
- ^ Circle-backed USD coin (cointelegraph.com)
- ^ USDC (cointelegraph.com)
- ^ borrowed (www.bloomberg.com)
- ^ Alex Mashinsky (cointelegraph.com)
- ^ contributing $10 million in equity investment (cointelegraph.com)
- ^ halted (blog.celsius.network)
- ^ Nexo offers to buy out Celsius’ loans amid withdrawal suspension (cointelegraph.com)
- ^ pic.twitter.com/Rp2dhCmdPu (t.co)
- ^ June 13, 2022 (twitter.com)
- ^ suggesting (twitter.com)
This article was first published on Cointelegraph.com