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The USDT stablecoin issuer, Tether, denies any correlation between its investment in Celsius and its reserves or stability.

The ongoing crisis of Celsius’s native token has nothing to do with the stablecoin provider Tether and will not impact its USDT reserves, according to the company.

Tether issued a statement on Monday regarding the major cryptocurrency lending platform Celsius halting withdrawals due to its rumored liquidity crisis.

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 USDT, the largest stablecoin pegged to the United States dollar based on a 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).

In 2021, Celsius reportedly borrowed $1 billion from Tether with Bitcoin (BTC) as collateral. Celsius founder and CEO Alex Mashinsky said that Celsius was paying an interest rate between 5% and 6%.

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.”

Celsius officially halted all withdrawals on its platform on Monday, citing “extreme market conditions” as its native CEL token lost about 50% of its value on Sunday.

Related: Nexo offers to buy out Celsius’ loans amid withdrawal suspension

The day before the collapse, 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.”

One thought on “Tether: Celsius crisis has no impact on USDT reserves

  1. With the crypto space being full of scammers, rug pulls, bullshit, shitcoins and meme coins, one has to develop quite the discerning eye and instinct to determine whether or not a coin is worth anything, or whether or not it will be worth anything in the future. This has saved many of us from being scammed many many times of course, but sometimes that instant can be very wrong as well. What projects and/or coins did you initially dismiss as meme coins/ rug pulls/scams/shitcoins, etc that later ended up being successful? Bonus points if it entered the top 50 at any point.

    Personally, for me, it was dogecoin before it got big. I got invited to a crypto gaming thing that I dismissed as a scam. It was before I even got into crypto, so you can imagine my surprise when I found out that it eventually got big

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