Tether has announced that the USDT reserves “hold strongly” even as cryptocurrency lending provider Celsius (CEL) feels the heat of crypto volatility.
The stablecoin issuer, in a statement to this effect released on Monday, said the events wont have an impact on the stablecoin’s reserves.
And going by events of not so long ago involving the collapse of TerraUSD (USD), Tether must have felt the need to issue a clarifying note.
“The recent events impacting the Celsius lending platform and its native token CEL are an unfortunate result of market volatility and extreme market conditions,” Tether noted.
No correlation with USDT
According to the company, while its portfolio holds an investment in Celsius, it is but a “minimal part” of its shareholders equity. Notably, Tether said its investment in the crypto lender has no correlation to its USDT reserves.
Additionally, the lending activity between Tether and Celsius “has always been overcollateralized,” adding to the overall assertion that none of what’s happened with Celsius has an impact on the stablecoin issuer’s reserves.
On Monday, Celsius announced a pause to all withdrawals, transfers and swaps as it tried to navigate massive volatility.
“We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations,” Celsius said in a message to the community.
The platform has not resumed the operations as at the time of writing. Meanwhile, the native CEL token is down 21% in the past 24 hours and nearly 96% down since its all-time high reached in January last year.