Stablecoin issuer Celsius got a $1 billion loan from Tether according to the latest reports that we have in our Tether news.
Tether is the issuer of the infamous USDT stablecoin and from it, Celsius got a $1 billion loan. The Celsius Network CEO Alex Mashinsky said that the company will pay an interest rate of 5% or 6% to Tether while Tether already loaned billions of dollars to other crypto companies using BTC as collateral. It even was the lead investor in the Celsius Network $30 million funding round in 2020.
Last month, Celsius recieved a cease-and-desist order from the Kentucky securities regulator over the interest earned on its crypto accounts. The regulator said that the accounts violate the state’s securities laws and fail to disclose to the customer what exactly happened to their deposits and whether they are getting protection under the state regulation. The reports showed that TEther’s reserves included billions of dollars of short-term loans to large Chinese companies which is a question that was long speculated on.
Tether however described all investigations as a “one-act play the industry has seen many times before.” It continued in a statement:
“This article does nothing more than attempt to perpetuate a false and aging story arc about Tether based on innuendo and misinformation, shared by disgruntled individuals with no involvement with or direct knowledge of the business’s operations. It’s another tired attempt to undermine a market leader whose track record of innovation, liquidity, and success speaks for itself.”
As recently reported, BlockFi is a New Jersey-based crypto lending platform and it faced a lot of scrutiny from the state securities regulators all summer and Coinbase also was warned by the US SEC that it will be sued if it launches its high-yield Lend program. Now the BTC lender Celsius is catching up on the regulator’s target list. The New Jersey Bureau of Securities filed a cease and desist order against the company to stop offering high-interest accounts to all New Jersey customers by the end of October. Today, the Texas State Securities Board also ordered the company to appear for an administrative hearing and even threatened to issue its own cease and desist orders against the company to stop serving the clients in the state. The order also declares that fines and restitutions are one of possible remedies.
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