Tether Liquidates Celsius Bitcoin Loan ‘Position Has Been Liquidated With No Losses’ to the Company Bitcoin News – Bitcoin News

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%+.

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 shareholders 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.

The companys blog post added that Tether leverages risk management processes and the firm states that while the media, critics, and community were wrongly fixated on Tether, other lenders including notable names in the space were blatantly providing lending facilities with nearly zero collateral. Those kinds of lending practices go against the ethos of Tether and the companys strict regulatory practice.

Meanwhile, during the last few weeks, a great number of crypto businesses have shown that they were exposed to firms like Celsius and the crypto firm Three Arrows Capital (3AC). The founder of Keyfi is suing Celsius, as the NFT whale also known as 0xb1, has accused the company of being a Ponzi scheme, and allegedly allowed its 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 like Voyager Digital, Blockfi, Babel Finance, and Vauld were all affected by 3ACs financial issues.

Today, stablecoins have an aggregate market capitalization of around $154 billion, and $65.9 billion worth of USDT is managed by Tether. During the past 24 hours, theres been $100 billion in global trade volume across crypto markets, and USDT commands $66.6 billion of that volume.

Tethers blog post about the Celsius bitcoin loan highlights how the company has been vilified by critics over rumors and speculation. Critics who make claims of Tethers inconsistencies clearly have no understanding of how lending, borrowing, and risk management work, Tethers blog post on Friday concludes.

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

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

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Tether Liquidates Celsius Bitcoin Loan 'Position Has Been Liquidated With No Losses' to the Company Bitcoin News - Bitcoin News