(FT) Tether is under the limelight after a major customer, Alex Mashinsky of Celsius Network, said that the company earns cryptocurrencies by lending out new stablecoins.
The claims raise controversy and question Tether’s promise of using only real dollars to issue tokens.
Mashinsky claims that Tether would mint USDT coins as long as a customer gives them enough liquid collateral that can include Bitcoin, Ethereum, and others. The stablecoins are destroyed as soon as the loan is closed.
Tether has already been facing scrutiny recently, with the US regulators fining the company tens of millions of dollars this year for misrepresenting its reserves. The company is also fighting a class-action lawsuit in the US for issuing USDT without collateral.
Tether’s 4% of total assets or $2.5 billion were “secured loans” as of June 2021, down from 12.6% earlier in the year.
USDTUSD is up +0.02%.
