On July 8, 2022, the company behind the largest stablecoin in the world, Tether, revealed that the firm liquidated a loan made to the crypto lender Celsius, and the liquidation caused “no losses to Tether.” According to the stablecoin issuer, the bitcoin loan to Celsius was “overcollateralized” by roughly “130%+.”
Tether Liquidates Bitcoin Loan Taken out by Celsius — Stablecoin Issuer Stresses It Will ‘Never Put the Integrity of Its Reserves at Risk’
The company Tether has informed the public that the firm “has never and will never put the integrity of its reserves at risk.” Tether noted on Friday that it did have an investment in Celsius, the embattled crypto lender, but the investment was “a minimal part of its shareholder’s equity.” A loan denominated in bitcoin (BTC) was taken out by Celsius and Tether said the loan was overcollateralized by more than 130%. “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,” Tether detailed. The stablecoin issuer added:This process was carried out in a way to minimise 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.
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