Tether, the issuer of the USDT stablecoin, has lent $ 1 billion to cryptocurrency lender Celsius Network, which faced regulatory issues last month.
According to a Bloomberg publication, Celsius Network CEO Alex Mashinsky confirmed that the company pays Tether an interest rate of 5-6% on the loan received. Recall that last summer, Tether led the $ 30 million Celsius Network funding round.
Last month, the Kentucky banking regulator banned cryptocurrency lending platform Celsius Network from providing services in the state, accusing it of selling unregistered securities. The regulator said that some of the company’s products violate state securities laws, and the firm did not notify customers about what was happening with their deposits and whether they were protected under government regulation.
A Bloomberg investigation revealed that Tether has lent billions of dollars to cryptocurrency companies using BTC as collateral. According to the publication, Tether’s reserves include billions of dollars in short-term loans to large Chinese firms, which some experts have previously suggested.
In response to the publication, Tether described the Bloomberg investigation as “a one-act play that the industry has seen more than once.”
“This article is nothing more than an attempt to perpetuate a false and outdated story about Tether, based on innuendo and misinformation shared by disgruntled people who are not involved in the operations of the business and do not know them directly,” the company said in a statement. “This is yet another attempt to undermine the position of a market leader whose track record of innovation, liquidity and success speaks for itself.”
Recall that previously, Tether has repeatedly found itself in the epicenter of controversial and suspicious events unfolding in the cryptocurrency industry.