Tether said that although the crypto-lending platform Celsius is part of its investment portfolio, the adverse events did not affect the financial stability of the issuer of the USDT stablecoin.
Celsius Feels Impact of Market Volatility, Tether Reserves Hold Strong https://t.co/7Rzpga1Lmx
— Tether (@Tether_to) June 13, 2022
On June 13, Celsius halted withdrawals, exchanges and transfers between accounts. In the past 24 hours, the CEL token fell about 41% and is trading near $0.21 (CoinGecko).
Competitor Nexo has already said it was prepared to buy Celsius’s loan portfolio.
The events affecting the platform’s operations were described by Tether as ‘the result of volatility and extreme market conditions’.
Bitcoin fell by more than 13% in 24 hours. At the time of writing, digital gold quotes are around $23,700. The total crypto market capitalization has fallen below $1 trillion.
In October 2021, Bloomberg reported that Tether lent the lending platform a total of about 1 billion USDT at an annual rate of 5-6%.
“Tether’s lending activity with Celsius (as with any other borrower) has always been over-collateralized and did not affect our reserves,” the company said.
As of writing, about 72.3 billion USDT are in circulation. The second-largest dollar-pegged stablecoin, USDC from the Circle consortium, has a supply of 54.5 billion tokens.
In May, Tether said that shifted most of the collateral backing USDT into U.S. Treasuries.