Tether Faces $2.4 Billion Lawsuit from Celsius Network
Celsius Network Limited, in collaboration with the Blockchain Recovery Investment Consortium, LLC, has taken legal action against Tether Limited and its affiliates in the United States Bankruptcy Court for the Southern District of New York, filing a lawsuit for $2.4 billion on August 9, 2024.
Details of Legal Dispute
- The lawsuit results from a 2022 agreement where Tether provided USD₮ to Celsius, backed by Bitcoin (BTC) collateral.
- As the price of BTC dropped in June 2022, Celsius needed to provide additional collateral to avoid liquidation.
- Celsius instructed Tether to liquidate the BTC collateral, closing out an $815 million position.
- In response, Celsius is seeking the return of $2.4 billion worth of BTC, although the liquidation was executed with their consent at June 2022 prices.
Tether’s Standpoint
- Tether refutes the lawsuit’s claims, highlighting that the agreement predates Celsius’ bankruptcy and accusing Celsius of trying to shift their mismanagement costs onto Tether.
- The company asserts that the lawsuit ignores key defenses and misapplies the law, and they are fully prepared to counter the claims in court.
Response from Tether
- Tether dismisses the lawsuit as baseless and describes it as a meritless shakedown, standing by the facts of the original agreement.
- They emphasize their strong financial position, with consolidated equity nearing $12 billion as of June 30, 2024, and stress that even if the claims were valid, Tether token holders would not be affected.
Impact on the Market
- The legal dispute between Tether and Celsius occurs amidst increasing regulatory and legal scrutiny within the cryptocurrency industry.
- Tether’s commitment to defending itself sets a precedent for how similar cases may be handled in the future, impacting market perceptions and legal interpretations within the crypto ecosystem.
Hot Take 🚀
As a crypto enthusiast, staying informed about legal disputes like the one between Tether and Celsius Network can provide valuable insights into the industry’s dynamics. The outcome of this lawsuit could shape future interactions between crypto companies and legal frameworks, influencing market behavior and investor confidence. Stay tuned for updates on this developing story!
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