Legal Battle Between Tether Limited and Celsius Network Over Bitcoin Liquidation
A lawsuit filed by Celsius Network against Tether Limited has sparked a legal battle over the liquidation of $2.4 billion in Bitcoin. Tether has vehemently denied the allegations made by Celsius Network, calling the lawsuit a “shakedown” and “baseless.” The lawsuit, filed in the U.S. Bankruptcy Court for the Southern District of New York, has raised questions about the handling of collateral and debt repayment. Here’s everything you need to know about the ongoing legal dispute:
Celsius Network’s Allegations Against Tether Limited
- Celsius Network claims that Tether improperly liquidated $2.4 billion in Bitcoin that belonged to them.
- According to Celsius Network, Tether was supposed to give them a 10-hour timeframe to make a deposit before liquidating the assets, but this did not happen.
- Tether allegedly disregarded the agreed-upon timeframe and proceeded to liquidate the Bitcoin, causing Celsius Network to lose its collateral.
- The $2.4 billion claimed by Celsius Network is based on the current value of Bitcoin.
Tether Limited’s Defense Against the Lawsuit
- Tether maintains that it acted within the terms of a 2022 agreement with Celsius Network.
- According to Tether, Celsius Network was required to post additional Bitcoin as collateral when prices fell, but failed to do so.
- When Celsius Network did not meet the collateral requirements, Tether claims it was instructed to liquidate the assets to cover a debt of $815 million.
- Tether disputes the legal foundation of the lawsuit and questions its jurisdiction, emphasizing that the liquidation was done with Celsius Network’s consent.
Financial Impact and Legal Ramifications
- Celsius Network’s bankruptcy filing in 2022 marked a significant financial event, leaving the company insolvent with liabilities exceeding assets by $1.2 billion.
- Former Celsius CEO Alex Mashinsky faced federal criminal charges and civil lawsuits following the company’s collapse.
- Celsius creditors approved a $2 billion restructuring plan in late 2022 to help the company emerge from bankruptcy.
Hot Take: What Lies Ahead in the Legal Battle?
The legal battle between Tether Limited and Celsius Network over the disputed Bitcoin liquidation is set to unfold in court, with both parties fiercely defending their positions. As the case continues to evolve, the outcome will have far-reaching implications for the crypto industry and the handling of collateral disputes. Stay tuned for more updates on this high-stakes showdown!
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