The full liquidation of Tether’s Bitcoin (BTC)-denominated loan to Celsius Network has reportedly been finalized loss-free, calming concerns related to the stablecoin issuer oversizing exposure to the crypto lender.

Specifically, Tether provided further explanation that its lending arrangement with Celsius stopped any downside risk from happening to its underlying business. 

Particularly, the BTC-denominated loan issued to Celsius was overcollateralized by 130%, with the original agreement enabling Tether to carry out liquidation for the collateral to cover the loan.

“This process was carried out in a way to minimise as much as possible any impact on the markets and in fact, once the loan was covered, Tether returned the remaining part to Celsius as per its agreement. Celsius position has been liquidated with no losses to Tether”. 

Rumors of Celsius’ insolvency was reportedly in circulation in June, following the crypto lender had to to postpone withdrawals because of “extreme market conditions.” Details of significant losses and liquidity constraints soon surfaced with the company onboarded new legal counsel to provide advisory regarding the restructuring.

With the crisis unfolding in June, Tether reportedly generated a statement detailing that its portfolio investments in Celsius share no association with the health and support of USDT, the most major stablecoin in terms of market capitalization globally.

“While Tether’s investment portfolio does include an investment in the company, representing a minimal part of our shareholders’ equity, there is no correlation between this investment and our own reserves or stability”. 

USDT ranks number one in the list of most vastly used stablecoin on the market but its dominance has witnessed a drop throughout 2021. 

At the moment, USDT possesses an overall market cap of $66 billion, per insights from CoinMarketCap. Circle’s USD Coin (USDC) comes in at a close second with $55.5 billion in capitalization.