The Celsius Network, a DeFi lending platform that uses Ethereum blockchain, says it has raised $10M led by Tether
Robert Stevens / Decrypt : Tweets: @decryptmedia and @thedaomaker Tweets: @decryptmedia : Controversial stablecoin company Tether once again headed into DeFi, this time as the lead investor in Celsius: https://decrypt.co/... https://twitter.com/... DAO Maker / @thedaomaker : 🗞️#Tether leads $10 million investment into #DeFi lending network #Celsius 🔸Celsius is a decentralized finance (DeFi) lending protocol. 🔸Tether has previously invested in DeFi startups, most recently in lending platform #Aave. #crypto #ETH https://decrypt.co/...
Context & Ripple Effects
In June 2020, Tether put its name on Celsius Network's cap table with a $10 million round — a small check that made the stablecoin issuer an early backer of one of crypto's fastest-growing yield lenders. Celsius rode that momentum to a $400M raise at a $3B+ valuation just sixteen months later, led by WestCap and Quebec's CDPQ.
The relationship then cut both ways. By 2022, Tether disclosed it had been a creditor too — and that it had liquidated its bitcoin-denominated loan to Celsius without losses as the lender came apart — while CEO Alex Mashinsky's court filings revealed a $439M claim against a "private lending platform" and, separately, his assertion that Tether issued USDT in return for cryptocurrencies rather than only USD. What began as a strategic investment ended as a stress test of both companies' balance sheets.
First-order effects
- Tether converts cash into an equity position in a lending platform whose core business is paying yield on deposits — including, in practice, on stablecoins like its own USDT.
Second-order effects
- The investment makes Tether simultaneously Celsius's investor, token supplier, and (as the 2022 loan disclosure showed) secured creditor — a stack of exposures that turns a borrower's distress into a direct test of the issuer's own risk management.
Third-order effects
- If the Celsius arc is the template, stablecoin issuers and yield platforms form a closed loop of mutual exposure in which a platform failure forces the issuer to liquidate collateral in public and defend its reserve claims — the dynamic that later drew Mashinsky's USDT-issuance allegations into the open.
The trend: Stablecoin issuers are entangling themselves as investors, token counterparties, and creditors of the yield platforms that recycle their coins, so platform failures now double as reserve-credibility events for the issuers themselves.