Stablecoin issuer Tether has lent some cryptocurrency companies money over the past few years.
Celsius Network receives $1 billion from Tether
Tether is one of the leading companies in the cryptocurrency space. The company is known for issuing the leading stablecoin, USDT and has supported other cryptocurrency projects over the years.
However, Tether is also one of the most controversial projects in the cryptocurrency space. There have been numerous allegations against the company since the 2017 Bull Run. More details are now emerging about the company and its activities.
According to a Bloomberg report earlier today, Tether has lent $1 billion to Celsius Network, a startup offering crypto lending services. Celsius Network CEO Alex Mashinsky stated the company pays an interest rate of 5%-6% to the stablecoin issuer.
The report further claims that Tether had borrowed cryptocurrency companies billions of dollars over the years, using Bitcoin as collateral. Furthermore, Bloomberg claims that Tether’s reserves include billions of dollars of short-term loans to large Chinese firms. This speculation is popular within the cryptocurrency space.
Tether describes the report as false
Tether reacted to Bloomberg’s report, calling it an act play the industry has seen many times before. The company said,
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. It’s another tired attempt to undermine a market leader whose track record of innovation, liquidity, and success speaks for itself.
Tether’s books have been audited in recent months. Its recent review, dated July 30, claimed that Tether’s tokens are fully backed by its reserve. Tether’s latest Consolidated Reserves Report or CRR was reviewed by Moore Cayman, an accounting network based in the Cayman Islands. According to the accounting firm, Tether has met its reserve obligations for the period that ended on June 30, 2021.