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Tether Has Loaned $1B to Celsius Network: Report
The stablecoin issuer has loaned billions of dollars to crypto companies, according to a Bloomberg investigation.
Updated May 11, 2023, 7:08 p.m. Published Oct 7, 2021, 12:05 p.m.
Tether, issuer of the eponymous stablecoin, has loaned $1 billion to Celsius Network, a crypto lender that has drawn the ire of financial regulators in several U.S. states.
- Celsius Network CEO Alex Mashinsky said the company pays an interest rate of 5%-6% to Tether, Bloomberg reported Thursday as part of an investigation into the stablecoin provider’s reserves.
- The investigation found that Tether had loaned billions of dollars to crypto companies using bitcoin as collateral.
- Tether was the lead investor in Celsius Network’s $30 million funding round in June 2020.
- Last month, Celsius Network received a cease-and-desist order from Kentucky’s securities regulator over interest earned on certain crypto accounts. The regulator says the accounts violate the state’s securities laws and fail to disclose to customers what happens to their deposits and whether they are protected under state regulation.
- Bloomberg’s investigation also found that Tether’s reserves include billions of dollars of short-term loans to large Chinese firms, something that has been speculated on widely.
- In response, Tether described Bloomberg’s investigation as “a one-act play the industry has seen many times before.”
- “This article does nothing more than attempt to perpetuate a false and aging story arc about Tether based on innuendo and misinformation, shared by disgruntled individuals with no involvement with or direct knowledge of the business’s operations,” Tether said in a statement. “It’s another tired attempt to undermine a market leader whose track record of innovation, liquidity and success speaks for itself.”
Read more: Tether Asks Court to Block NYAG From Releasing Documents to CoinDesk
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UPDATE (OCT. 7, 12:41 UTC) Adds Tether’s investment in Celsius Network in third bullet point.
UPDATE (OCT. 7, 13:06 UTC) Adds Tether’s response to the Bloomberg investigation.
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