Tether reveals how it returned funds to Celsius following liquidation

On June 15th, Paolo Ardoino, CTO of Tether and Bitfinex, said: Disclosure Tether liquidated the loan given to Celsius “without loss”.Tether confirmed the clearing process and revealed that it had “returned the rest” [of the loan] To Celsius. “

Tether also confirmed that the decision to clear the loan was “reconfirmed in writing before the start of the clearing event.”

Ardoino added that the liquidation was “made in a way that minimized the impact on the market.” This could be due to OTC trading, addition to hedged positions, or a new increase in reserve Bitcoin.

The fact that the loan was liquidated without loss is that the loan 130%.. This action means that Tether had 30% more Bitcoin as collateral than the stablecoin it lent to Celsius.

“This process was carried out in a way that minimized the impact on the market. In fact, once the loan was covered, Tether returned the rest to Celsius according to the agreement. Position in Celsius. Was liquidated without loss. To the tether. ” https://t.co/K1cBkaQWWI

Paolo Ardoino (@paoloardoino) July 8, 2022

If tether needed a lower level of collateral, it could have suffered losses in the current turbulent and volatile market. However, Ardoino confirmed that the loan was liquidated while it was still over 100%. This means that the tether was able to safely leave the position, even with large slippage due to low liquidity.

Incorrect. Liquidation occurred when the price was well above 100%, and in fact Tether returned the excess to Celsius.

Paolo Ardoino (@paoloardoino) July 8, 2022

In addition, Tether ensured that its exposure to Celsius by “investment” represents the “minimal portion” of its shares and does not affect Tether’s reserves.

Tether’s blog post also included a pitiful paragraph for over-leveraged lenders. In contrast to Tether’s 130% collateral

“Other lenders, including well-known names in the field, have blatantly provided lending facilities with little collateral, which violates the strict regulatory practices set by the industry as standard.”

It ended with a sentence like Ardoino tweeting to his followers, proclaiming that “critics claiming Tether’s contradictions do not understand how lending, borrowing and risk management work.”