Celsius Files $2.4 Billion Bitcoin Lawsuit Against Tether, Tether Responds with Allegations of “Shakedown”
Tether Responds to Lawsuit from Celsius Network
Tether, the creator of the stablecoin USDT, has issued a strong rebuttal against Celsius Network following a legal action taken against the company. Tether characterized the lawsuit as an attempt to deflect blame for financial mismanagement onto Tether.
In a recent statement released by Tether, it was revealed that in 2022, a deal was struck between Tether and Celsius where Celsius borrowed USDT from Tether, using Bitcoin (BTC) as collateral.
When the value of BTC decreased, Celsius failed to provide additional collateral as stipulated in the agreement. Consequently, Tether executed the liquidation of the BTC collateral in accordance with the terms of the agreement after Celsius did not fulfill its obligations.
Celsius, through its Blockchain Recovery Investment Consortium, has accused Tether of conducting an improper liquidation. Celsius is seeking around $2.4 billion in BTC restitution from Tether. However, Tether has dismissed the allegations as unfounded and has pledged to defend itself vigorously.
Tether CEO Paolo Ardoino, in a post on X, argued that Tether adhered to the terms of the contract and criticized the lawsuit for misunderstanding fundamental concepts such as risk management, market slippage, and liquidation processes.
Ardoino further emphasized that even if the lawsuit progresses, Tether’s robust financial standing, with nearly $12 billion in equity, ensures that holders of USDT will not be impacted.
Celsius Network, previously a prominent player in the crypto lending sector, recently emerged from insolvency after successfully executing transactions under its confirmed restructuring plan, which involved disbursing over $3 billion in crypto and cash to creditors.
Additionally, creditors of Celsius received stakes in Ionic Digital, a Bitcoin mining firm established in February, as part of the insolvency resolution. Ionic Digital has mined more than 1,300 BTC since its inception and currently holds over 1,800 BTC, as per a recent press release.
The legal dispute between Tether and Celsius Network underscores the complexities and challenges within the crypto industry, particularly concerning contractual agreements and risk management practices. Tether’s firm stance against the accusations from Celsius reflects the high-stakes nature of such legal conflicts in the evolving landscape of digital finance.
