Tether remains one of the controversial cryptocurrency projects, and more details are now emerging regarding its activities
Tether, the issuer of the USDT stablecoin, has reportedly lent Celsius Network $1 billion. This was revealed in a report published by Bloomberg after an investigation into the activities of the leading stablecoin issuer in the world.
According to Bloomberg's report, Tether had lent several cryptocurrency companies money over the years, using Bitcoin as collateral. Bloomberg's Zeke Faux said Tether lent $1 billion to Celsius Network, a giant quasi-bank for cryptocurrency investors. Celsius's CEO Alex Mashinsky told Bloomberg that the company pays an interest rate of 5% to 6% on the $1 billion loan from the USDT issuer.
Celsius is one of the top lending platforms in the cryptocurrency space. However, the company and its business model have come under pressure in recent weeks, with some states in the US ordering it to stop providing services to their citizens.
Celsius, similar to its competitor BlockFi, has come under fire from state regulators in the United States. However, it remains active in numerous states across the country and other parts of the world. The regulators claim that Celsius is offering unregistered securities to US citizens.
Tether is currently the leading stablecoin issuer in the world. Its USDT stablecoin has a market cap of $68 billion, more than double that of the second-place stablecoin, USDC. However, Tether has been one of the most controversial cryptocurrency projects in recent years.
Following the market bull run of 2017, Tether was accused of manipulating the market, leading Bitcoin to reach its then all-time high of nearly $20,000. Tether was accused of minting USDT tokens without fully backing them with real US dollars.
However, the company has undergone external audits in recent months to show that its USDT tokens are fully backed by fiat currencies. Tether is still not completely trusted within the cryptocurrency community though as controversial reports about the project continue to surface once in a while.