Unveiling Celsius’ Legal Battle Against Tether
Celsius, a defunct crypto lender that declared bankruptcy in 2022, has taken legal action against Tether, the leading stablecoin issuer, over allegations of misappropriation of assets. This legal move by Celsius is part of its efforts to recover substantial funds, totaling over $3 billion, for its creditors.
Roots of Celsius’ $3.5 Billion Claim Against Tether
Having initiated multiple lawsuits against various cryptocurrency entities recently, Celsius has now directed its legal focus towards Tether, a prominent stablecoin provider in the crypto industry. Among the companies currently entangled in legal disputes with Celsius are Badger DAO, Bancor, and Compound.
In the most recent lawsuit filed on August 9, Celsius demanded a significant sum from Tether, seeking the return of 39,542 BTC in collateral, along with damages and legal expenses. The lawsuit stems from a situation where Tether allegedly requested additional collateral from Celsius to cover loans as the price of Bitcoin began to dip in early 2022.
Details revealed in the court filing indicate that Celsius had obtained $300 million in USDT loans from Tether shortly before filing for bankruptcy in July. Despite complying with requests for more collateral by providing additional BTC between May and June 2022, Tether proceeded to liquidate Celsius’ collateral prematurely, breaching the agreed-upon waiting period.
Unfair Disposition of Bitcoin Collateral
The lawsuit filed by Celsius against Tether asserts that the collateral liquidation was carried out at a disadvantageous price point, benefiting Tether at the expense of the lender’s interests. Celsius claims that had they been given the opportunity to meet the collateral demand as per the contract, they would have avoided the premature liquidation at a time when the cryptocurrency market was at a low point.
The legal action from Celsius seeks to compel Tether to return a total of 57,428.64 BTC, encompassing various Bitcoin transfers made preferentially to the stablecoin issuer. At the current Bitcoin price of $61,110, this amounts to approximately $3.5 billion in value.
Tether’s Response to the Lawsuit
In a recent blog post, Tether categorically refuted the allegations brought forth by Celsius, dismissing the lawsuit as baseless and devoid of merit. The stablecoin company emphasized its adherence to the terms of the agreement established with Celsius prior to the latter’s bankruptcy.
Paolo Ardoino, CEO of Tether, reiterated the company’s stance on the legal matter in a statement on the X platform, denouncing the lawsuit as a money-driven endeavor with no tangible benefits besides enriching legal professionals involved in the case.
Tether’s Position on the Legal Dispute
Tether highlighted the procedural framework governing its engagements with customers, including Celsius, whereby overcollateralization in Bitcoin secures the provision of USDt to selected clients. In response to evolving market conditions, Tether takes appropriate actions to safeguard its interests in such arrangements.
Furthermore, Tether underscored its robust financial standing, with consolidated equity amounting to $12 billion, offering reassurance to USDT holders that any potential escalation of legal disputes would not impact them adversely.
Hot Take: Celsius vs. Tether Legal Battle Intensifies
As Celsius intensifies its legal battle against Tether, the cryptocurrency industry witnesses a clash between two prominent entities over accusations of asset misappropriation and breach of contractual obligations. The outcome of this legal showdown has broad implications for the crypto sector and underscores the importance of transparent and fair dealings within the ecosystem.
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