Tether Implies USDT Reserves Resistant to Celsius Catastrophe

Tether Implies USDT Reserves Resistant to Celsius Catastrophe

Tether contradicts and implies that the significant fall of the Celsius network won't have any impact on the firm's stocks in the future.

On June 13, Tether released a statement indicating that the significant fall of the major US cryptocurrency lending and staking organization Celsius network and its token CEL won’t have any impact on USDT reserves.

As stated in the official report, Tether emphasizes that its “lending activity with celsius has always been overcollateralized and has no impact on our reserves.” On top of that, the company also added that the recent events underline an unfavorable outcome of the crypto market’s current turmoil.

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In addition, the company Tether and Celsius network have always been partners as both had supported each other in the past. For instance, two years ago, Tether provided the staking platform with a $10 million fund, whereas in 2021, Celsius borrowed $1 billion from the organization. However, Tether implied that such investments don't have anything in common with Tether, as stated in the report:

“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.”

On June 13, Celsius announced that it would pause all of its withdrawals and exchanges between accounts. Since then, Celsius Coin (CEL) has fallen roughly 53% of its value.

On top of that, some users within the crypto community suggested that Celsius won’t last long and users within the network will eventually lose all their dedicated funds.

Interestingly enough, before the massive fall on Sunday, the CEO of Celsius Alex Mashinsky stated that the rumors that users were unable to withdraw their funds from the platform were false.

In other news, last week, Tether announced the launch of new Tether (USDt) tokens on a Proof-of-Stake (PoS) blockchain dubbed Tezos to drive innovative applications in DeFi, digital payments, and other significant spheres.

Gyth L. - Crypto Analyst

by Gyth L. - Crypto Analyst, BitDegree