Jul 8, 2022 - Economy & Business

Tether liquidated a $900 million Celsius loan

Illustration of two cubes, one inside the other, and the bigger one liquefying.
Illustration: Brendan Lynch/Axios

Tether, the world's biggest stablecoin issuer, liquidated a $900 million loan made to troubled crypto lender Celsius, a Tether spokesperson confirms for Axios.

Why it matters: This crypto market downward spiral has been marked by a buildup of debt that big-time players couldn't pay at exactly the wrong time — to what degree these firms were connected with each other is being revealed in drips and drabs as some file for bankruptcy proceedings and others, sue.

What's happening: Tether, in a blog post today, said it liquidated a Celsius loan "with no losses" and with Celsius' agreement.

  • The BTC-denominated loan was overcollateralized and once it was covered post-liquidation, the remaining sum was returned to Celsius, according to Tether.

Catch up quick: Tether did not disclose the amount of the loan in the post.

  • The size was first hinted at in the lawsuit filed yesterday against Celsius, in which it was indicated that the crypto lender had a $1 billion loan from Tether.
  • The spokesperson told Axios that Tether CTO Paolo Ardoino cited a $900 million loan to the firm on CNBC today.

What they're saying: Tether appears to be taking a victory lap.

  • "Critics who make claims of Tether’s inconsistencies clearly have no understanding of how lending, borrowing, and risk management work," it said in today's blog post.

Flashback: Tether's loan to Celsius "about" $1 billion in USDT was first reported by Bloomberg in October, citing CEO Alex Mashinsky.

Yes, but: What makes Tether's Friday announcement odd, is that they put out a virtually identical statement on June 15.

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