Tether has initiated legal action in São Paulo to recover a $300 million loan extended to Titan Holding, a company within the Master conglomerate controlled by Daniel Vorcaro. Vorcaro was arrested Thursday as part of one of Brazil's largest financial frauds. The Central Bank of Brazil liquidated Banco Master in November after discovering a $2.2 billion hole in its reserves, affecting over 1 million customers.
Loan Issued in March 2025, Now in Default
The loan, made by Tether Investments (Tether's venture arm), was due on March 28, 2026 — exactly one year after issuance. Tether has received no repayment. In its lawsuit, Tether requests the court "freeze financial assets held in bank accounts, financial applications, investments, and any other financial assets by defendants Titan, Master Holding, and Master Participações." The company now joins a long list of creditors seeking restitution from the Master group, whose collapse caused losses in the tens of billions of reais.
Tether stressed that this loan is not part of the reserves backing USDT. The firm's secured loan portfolio comprises 8.25% of its total reserves, or approximately $15.8 billion. Tether claims these loans are "over-collateralized and subject to margin calls and liquidation mechanisms to maintain coverage."
Galaxy's Alex Thorn: Tether Is Crypto's Top CeFi Lender
Alex Thorn, head of firmwide research at Galaxy Digital, stated in December 2025 that Tether is "the largest centralized finance (CeFi) lender in crypto, with a loan book exceeding $14 billion." He framed Tether's lending activities as part of a diversification strategy away from its U.S. Treasuries income. While the $300M default is sizable, analysts note it represents a small fraction of Tether's overall reserves and is unlikely to impact USDT's peg. However, the Brazilian legal process could take years, and Tether will compete with other creditors for recovery from Master's remaining assets.