Celsius Network ponzi scheme contagion spread to Tether’s parent company, USDT drops below $1 peg

Celsius Network, a bankrupt crypto lender accused of running “ponzi schemes” received funds from iFinex Inc., the firm that owns and operates cryptocurrency exchange Bitfinex and stablecoin Tether (USDT). The filing lists iFinex -  registered in the British Virgin Islands - as a creditor of a Celsius Network shell company. 

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Celsius Network’s list of creditors includes Tether’s parent company in new development

A bankruptcy filing by the defunct crypto lender, shows Tether’s parent company iFinex Inc. lent funds to a shell company owned by the Celsius Network, which has been accused of operating a “ponzi scheme.” 

In July 2022, Jason Stone, the CEO of KeyFi sued crypto lender Celsius Network for allegedly refusing to honor a contract and using customer funds to manipulate crypto markets. When news of Celsius’s bankruptcy made the headlines, stablecoin Tether steered itself clear of the controversy.

The filing has revealed that iFinex Inc. lost funds with the collapse of the bankrupt crypto lender and ranks on the list of creditors. 

Celsius Network bankruptcy filing

Experts have therefore identified Tether’s parent company’s exposure to crypto lender Celsius and the stablecoin is likely to suffer as a result. 

Based on data from CoinGecko, USDT suffered a depeg on January 17, dropping below its $1 parity for a one-hour time period. USDT hit a 24-hour low of $0.98, after losing its $1 peg for an hour.