Tether has reassured investors and members of his community that the recent liquidation of the loan by controversial crypto firm Celsius Network will not negatively affect its reserves.
According to the statement, the company is focused on protecting investors’ money and this includes protecting the integrity of its reserves without compromise.
This principle was never undermined when investing in Celsius, the company claimed
The company also reiterated that its investment in Celsius represents a small portion of its equity.
According to the statement,
There is no correlation between this investment and Tether’s own reserves or stability. The Tether loan taken out by Celsius was an overcollateralized loan denominated in BTC (130%+), and the decision to liquidate the collateral to cover the loan was part of the original terms of the agreement.
Tether’s statement also said the company had developed risk measurement processes that allow it to properly assess its financial decisions.
repeat that Celsius, a leading crypto lending company, is currently facing liquidity problems. The company’s problems started in the recent crypto market collapse, with the Terra ecosystem collapsing and the Bitcoin price dropping below $20,000.
To avoid a total shutdown, the company pay back are loans, liquidating numerous assets.
Tether CTO speaks
A tweet from the company’s Chief Technical Officer, Paolo Ardoino, also indicated that the process is designed to have minimal impact on the market.
“This process was conducted in a way to minimize the impact on the markets as much as possible and in fact, once the loan was secured, Tether returned the remainder to Celsius under its agreement,” Ardoino said. “Celsius position has been liquidated with no losses for Tether.”
Tether is increasingly confronted with to ask from the crypto community about its investment in Celsius and its reserve. However, the company has maintained that it has remained in good shape despite the market decline.
Tether remains the dominant stabelcoin in the crypto industry, despite the rapid growth of other competitors. USDT has a circulating supply of $66 billion, while its closest competitor, USDC, has an offer of $55 billion.