Tether, the company behind USDT, the largest stablecoin by market capitalization, revealed that it liquidated Celsius’s position without risk to its reserves.
In a press release on Friday (July 8, 2022), Tether stated that beleaguered lending platform Celsius took an overcollateralized loan from the company, denominated in bitcoin (BTC).
The stablecoin issuer said it has since liquidated the loan based on the agreed-upon terms of the transaction. According to Tether:
“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.”
The statement also mentioned that the firm had some investment in Celsius, and though it did not state an exact amount, Tether assured that it represented a “minimal part of its shareholder equity,” adding that it did not impact the company’s reserves or stability.
Tether’s latest update comes as Celsius is experiencing liquidity issues. As earlier reported by CryptoPotato, the crypto lending platform repaid its final debt of $41.2 million in DAI to Maker, causing a release of 21,862 WBTC (worth approximately $450 million).
Celsius’s former asset manager also sued the firm on allegations of fraud and market manipulation.