Tether Challenges Celsius: The $3.3 Billion Legal Showdown

Tether Challenges Celsius: The Future of Crypto Amid Legal Challenges

The firm that created USDT, the most valuable stablecoin in the world based on market capitalization, Tether, announced that it will fight bankrupt cryptocurrency lender Celsius’s shakedown lawsuits. According to a court filing, Celsius requested on Friday that the Southern District of New York U.S. Bankruptcy Court force Tether to give over 57,428.64 Bitcoin in total or grant the present value of all Bitcoin, almost $3.3 billion at the current price of the cryptocurrency.

This lawsuit incredibly now seeks the return of approximately US$2.4 billion worth of BTC from Tether, despite the BTC being liquidated at Celsius’ direction and with Celsius’ consent at June 2022 prices,

Tether

Tether CEO Responds to Celsius’ Claims of Fraudulent Bitcoin Transfers

This lawsuit focuses on a loan arrangement that Celsius and Tether had so that Celsius could borrow stablecoins to operate certain critical aspects of its business, as stated in the lawsuit. According to the lawsuit, Celsius claims that Tether shielded itself from the approaching bankruptcy by conducting preferential and fraudulent transfers of bitcoin over the ninety-day period prior to Celsius’ bankruptcy filing, when the market fell in mid-2022. To be more precise, the lawsuit claims that Tether repeatedly requested and obtained a sizable quantity of fresh, additional collateral to strengthen its position in the upcoming bankruptcy.

“This baseless lawsuit is trying to claim that we should give back the bitcoin that were sold to cover Celsius’ position. There are plenty of flaws in the claimant’s filing and we’re very confident in the solidity of our contract and our actions … This lawsuit will be fought till the end. It’s important to set an example on behalf of the entire industry that shameless money grabs will not work.”

Tether CEO Paolo Ardoino

Tether Explains BTC Liquidation Terms in Defense Against Celsius Lawsuit

Tether claims that during the market meltdown, the agreement mandated that Celsius post additional collateral to avoid the liquidation of its BTC, and that when Celsius chose not to post additional BTC, it directed Tether to liquidate the BTC collateral Tether held. Additionally, Tether stated that even in the most remote scenario in which this baseless lawsuit will get somewhere, Tether token holders will not be impacted. This is because, as of June 30, the Tether Group’s consolidated equity was close to $12 billion.

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