Celsius Network CEO Alex Mashinsky says Tether has issued USDT in return for cryptocurrencies, calling into question Tether's claim that it only accepts USD
Stablecoin operator accepts crypto in return for some loans, big customer says — A major customer of Tether has said the company lends …
Tether's public claim that it only accepts USD for USDT issuance is directly contradicted by a major customer, putting the company's reserve-composition disclosures under renewed scrutiny.
Second-order effects
Tether's own reporting shows the pattern institutionalized: loans denominated and payable in its own stablecoin reached $6.1B by September 2022, and the firm later resumed client lending within a year of pledging to stop — meaning the practice Mashinsky alleges is one Tether has repeatedly returned to.
Third-order effects
If a stablecoin issuer can create its own liability against crypto collateral, USDT functions partly as a credit product rather than a dollar proxy, sharpening the case for reserve audits and regulatory treatment of stablecoins as lenders — the legitimacy gap regulators have been probing.
The trend: Stablecoin issuance is drifting from dollar-backed payments toward collateralized lending denominated in the issuer's own token, with Tether's disclosure cadence — and outside audits — setting the credibility test.
Tether's terms of service explicitly prevents it from creating new USDT stablecoin units for bitcoin: “only money will be accepted upon issuance.” So why is Tether lending USDT to Celsius in return for bitcoin/ethereum collateral? https://www.ft.com/... via @kadhim https://twitte…
Reporting confirming what we've known for years: Tether is happy to print coins unbacked by money. I love their response to this allegation, which is essentially “We lied so long it was like we were basically telling the truth, so what's the big deal? The frog boiled long ago.” h…
The blurry lines between secured loans backing a fraction of USDT (4%) & Celsius's fuzzy practices (30% overcolateralized) is driving 2 of the most practical crypto regualtory actions - blocking crypo lending & stablecoin regulation. https://www.ft.com/...
“New USDT is issued for such loans,” he added, and later destroyed when the loan is closed “so it does not permanently increase USDT in circulation”.' This is exactly how banks create and destroy money. https://www.ft.com/...
Exclusive: Tether has been accused of lending out new stablecoins in return for cryptocurrencies — a claim that calls into question the company's promise that it uses only real dollars to issue its tokens http://ft.com/...
Celsius is an unregulated crypto bank. Tether is lending it reserves against collateral in exactly the same way that central banks do for regulated commercial banks.
“If you give them enough collateral, liquid collateral, bitcoin, ethereum and so on . . . they will mint tether against it,” Alex Mashinsky of Celsius told the FT https://www.ft.com/...