Tether has given a BTC-backed loan to Celsius Holdings, which has been facing major problems due to the bear market. A lot of companies and projects invested in them have faced losses due to this. However, Tether, which was also indirectly invested in Celsius, said it had no impact on their reserves as they liquidated their position at the right time.
Tether liquidates position with zero losses
Tether issued a BTC-backed loan to Celsius Holdings a while back. And now that Bitcoin’s price has fallen a lot, the loan got liquidated despite the fact that it was over-collateralized by 130%. Celsius not being able to add more collateral was the problem. Tether didn’t face any losses as the agreement was such that the collateral could be liquidated to cover the loan amount.
The stablecoin issuer made a statement that the liquidation was done in a way that the markets were not affected a lot, and the loan amount was also recovered. Celsius also got back a part of the collateral back as per the agreement with Tether.
We should note that Tether made it clear that the Celsius investment had nothing to do with USDT. So, users must not worry about the stablecoin losing its peg. It also doesn’t affect their reserves, and even if you consider that it did, they didn’t face any losses.
What does this mean for Celsius Holdings?
It is important to note that the company has been in major turmoil for a while now. They had even paused withdrawals on their platform due to the bear market. And since prices are not going up, the liquidations and losses are piling up. There have also been rumors that Celsius Holdings has become insolvent. And now, Tether also liquidating the BTC-backed loan it gave the company is surely going to leave a dent.
We can soon find out whether the rumors of Celsius’s insolvency are true and will the investors will be able to get back their funds. Honestly, I do not have high hopes for the same.
What are your thoughts as Tether has liquidated Celsius position? And do you think that Celsius will be able to get out of this mess, and investors will get back their funds? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.
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