Market Analysis Report (08 Oct 2021)

In the course of an investigation into leading stablecoin issuer Tether, Bloomberg reporter Zeke Faux unearthed that the firm has lent “billions of dollars more to other crypto companies, with Bitcoin as collateral.” One of those companies is Celsius Network.

Tether’s USDT stablecoin currently has a supply of over $70 billion in circulation but its backing has been controversial. Per Faux, the CEO of the cryptocurrency lending platform Celsius, Alex Mashinsky, said the firm has $1 billion of USDT lent to it, and pays an interest rate of 5% to 6% on the funds.

Celsius, along with competitor BlockFi, has become the target of state securities regulators for their interest accounts, as regulators say these are unregistered securities. Tether was notably the lead investor in Celsius Network’s $30 million fund round in June 2020.

Bloomberg’s investigation also found Tether’s reserves include billions of dollars of short-term loans to large Chinese firms. Tether responded to the investigation saying it “ does nothing more than attempt to perpetuate a false and aging story arc about Tether based on innuendo and misinformation.”

Source: https://www.cryptocompare.com/email-updates/daily/2021/oct/08/