Tether Fights Back Against Seemingly Unfair Celsius Lawsuit

Tether has officially rejected the lawsuit put forth by Celsius Network Limited concerning a $2.4 billion Bitcoin (BTC) liquidation, calling it unfounded and blaming Celsius for poor financial management.

The Blame Game

Filed on August 9th in the United States Bankruptcy Court for the Southern District of New York, Celsius alleges that Tether wrongfully liquidated Bitcoin collateral in June 2022 and is seeking its return. Tether, however, claims the liquidation was conducted with the consent granted by Celsius which was also based on the price of Bitcoin at the time.

In 2022, Tether provided USDT to Celsius, which used Bitcoin as collateral. When Bitcoin plummeted in June, Celsius faced a margin call and should have added more collateral to prevent liquidation. Instead, Celsius directed Tether to liquidate the Bitcoin to settle an $815 million USDT debt. Tether argues the lawsuit misrepresents the law and the agreement terms, aiming to shift the blame onto them instead of Celsius.

Fighting Back

Tether plans a strong defense and is confident in a favorable outcome, stating that they will not yield to meritless litigation. This case highlights the complexity of financial agreements in the crypto sector and the importance of clear contracts. As it unfolds, the lawsuit could influence how similar disputes are handled and impact cryptocurrency lending and collateral management practices.

As one of the most important companies in the crypto sector, Tether issues the USDT stablecoin, which is pegged to the United States Dollar (USD) to maintain a stable value. Stablecoins like USDT are crucial because they provide a stable store of value and facilitate transactions within the cryptocurrency market, helping to bridge the gap between volatile cryptocurrencies and traditional fiat currencies.