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Celsius Update | Facing Tether's liquidation of loans and repayment of on-chain debt, still holding nearly $700 million in collateral

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Celsius Update | Facing Tether

Recently, allegations of lack of hedging and risk control against Celsius by the founder of asset management company KeyFi have sparked attention. Celsius remains silent on the matter and continues its on-chain repayment process. At the same time, USDT issuer Tether claims to have liquidated an overcollateralized loan from Celsius, emphasizing that it did not cause any losses and is unrelated to the reserve fund.

Celsius Repaying Loans Continuously

Starting from 6/14, Celsius has been repaying loans to various lending agreements to raise the liquidation line, including:

Maker:

  • Repaid $82 million
  • Retrieved 23,962 WBTC collateral
  • Transferred 24,462 WBTC to FTX exchange

Aave:

  • Repaid $16.24 million in DAI, $3.17 million in USDC
  • Owes $150 million USDC
  • Collateral value of $470 million

Compound:

  • Owes $85.21 million DAI
  • Collateral value of $220 million

In addition to the WBTC already retrieved, after full repayment, Celsius can reclaim collateral worth nearly $700 million. The transfer of WBTC to the FTX exchange not only has the possibility of hedging and repaying debts, but some in the crypto community also do not rule out the potential for Celsius to convert to BTC.

However, Celsius and its founder Alex Mashinsky have not responded to the allegations made by 0xb1 on the 8th regarding Celsius's improper management of user assets.

Tether Liquidates Celsius Loan

Tether released a statement on 7/8 announcing the liquidation of a loan from Celsius that was over-collateralized with BTC by more than 130%. The transaction only represents a small portion of shareholder equity and is unrelated to Tether's reserves and stability. The liquidation of collateral was executed based on the terms of the agreement between the two parties, with Tether emphasizing that this action did not cause any losses to Tether.

Recently, there have been anonymous reports of institutions shorting USDT, with bearish news including Tether's continued reduction in proportion and its holding of commercial paper. Some in the crypto community have lost confidence in USDT, using it as a primary basis for FUD.

Therefore, despite Tether CTO Paolo Ardoino clarifying on Twitter that this BTC loan is unrelated to reserves, some in the community still believe that a portion of Tether's reserves includes high-volatility assets such as BTC.