Tether Has Loaned $1B to Celsius Network: Report

The stablecoin issuer has loaned billions of dollars to crypto companies, according to a Bloomberg investigation.

Oct 7, 2021 at 12:05 p.m. UTC
Updated Oct 7, 2021 at 1:35 p.m. UTC

Jamie Crawley is a CoinDesk news reporter based in London.

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.”

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.

The Festival for the Decentralized World
Thursday - Sunday, June 9-12, 2022
Austin, Texas
Save a Seat Now

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Jamie Crawley is a CoinDesk news reporter based in London.

Jamie Crawley is a CoinDesk news reporter based in London.

Trending

1
Morgan Stanley Warns NFTs Next to Watch After UST Collapse, Bukele Announces Mega Banks Meeting in El Salvador

The most valuable crypto stories for Monday, May 16, 2022.

The most valuable crypto stories for Monday, May 16, 2022.

2
First Mover Asia: Metaverse ETFs Are Underperforming Gaming ETFs; Cryptos Return to the Red

Public interest continues to grow about the metaverse, but not as much in metaverse ETFs. Does crypto belong in everything?

Public interest continues to grow about the metaverse, but not as much in metaverse ETFs. Does crypto belong in everything?

3
Coinbase Expands Features, Allowing Some App Users to Access Ethereum-Based Dapps

The move will let Coinbase users purchase NFTs, trade on decentralized exchanges and borrow and lend on various DeFi platforms.

The move will let Coinbase users purchase NFTs, trade on decentralized exchanges and borrow and lend on various DeFi platforms.

4
S&P Global Ratings Forms DeFi Group to Build Out Crypto Framework

The credit rating giant named Charles "Chuck" Mounts as chief DeFi officer to lead the unit.

The credit rating giant named Charles "Chuck" Mounts as chief DeFi officer to lead the unit.