Tether liquidates Celsius Bitcoin loan – ‘the position has been liquidated without loss’ to the company – Bitcoin News

On July 8, 2022, the company behind the largest stable coin in the world, Tether, revealed that the company liquidated a loan granted to the crypto lender Celsius, and the liquidation caused “no loss for Tether.” According to the stablecoin issuer, the Celsius bitcoin loan was “collateralized” by about “130% +.”

Tether liquidates Bitcoin loan taken out by Celsius – Stablecoin issuer emphasizes that it ‘will never jeopardize the integrity of its reserves’

The company Tether has informed the public that the company “never has and will never put the integrity of its reserves at stake.” Tether noted on Friday that they had an investment in Celsius, the controversial cryptocurrency lender, but the investment was “a minimal part of the shareholder’s equity.”

A loan denominated in bitcoin (BTC) was taken up by Celsius and Tether said that the loan was secured by more than 130%. “The decision to liquidate the collateral to cover the loan was part of the original terms of the agreement between the two entities and confirmed in writing before the start of the liquidation event,” Tether said. The Stablecoin issuer added:

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 in accordance with the agreement. The Celsius position has been wound up without a loss for Tether.

Stablecoin issuer says Tether critics “have no understanding of how lending, loans and risk management work”

The company’s blog post added that Tether exploits risk management processes, and the company states that “while the media, critics and society were mistaken for Tether, other lenders, including notable names in the area, openly provided lending facilities with almost zero security.” This type of lending practice runs counter to the ethos of Tether and the company’s “strict regulatory practices.”

Meanwhile, in recent weeks, a large number of crypto companies have shown that they were exposed to companies such as Celsius and the crypto company Three Arrows Capital (3AC). The founder of Keyfi is suing Celsius, as the NFT whale is also known as “0xb1”, has accused the company of being a “Ponzi scheme” and allegedly allowed the entire portfolio to have “naked exposure to the market”.

It was further reported this week that Blockchain.com lost $ 270 million from 3AC exposure and crypto companies such as Voyager Digital, Blockfi, Babel Finance and Vauld were all affected by 3AC’s financial problems.

Today, stack coins have a total market value of around $ 154 billion, and USDT for $ 65.9 billion is managed by Tether. Over the past 24 hours, there has been $ 100 billion in global trading volume across cryptocurrencies, and USDT has $ 66.6 billion of that volume.

Tether’s blog post about the Celsius bitcoin loan highlights how the company has been slandered by critics due to rumors and speculation. “Critics who make claims about Tether’s inconsistencies clearly have no understanding of how lending, loans and risk management work,” Tether’s blog post concluded on Friday.

What do you think about Tether liquidating the bitcoin loan taken out by Celsius? Tell us what you think about this topic in the comments section below.

Jamie Redman

Jamie Redman is a news editor at Bitcoin.com News and a financial engineering journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open source and decentralized applications. Since September 2015, Redman has written more than 5,700 articles for Bitcoin.com News about the disruptive protocols that are emerging today.