Celsius Files Lawsuit Against Tether Amid Restructuring Process
The bankrupt cryptocurrency company Celsius, currently undergoing a restructuring process, has filed a lawsuit against Tether, the issuer of USDT. Celsius is demanding the return of Bitcoin (BTC) that it provided to Tether as collateral.
During its bankruptcy proceedings, Celsius borrowed a certain amount of USDT from Tether, sending 39,542.42 BTC as collateral for this loan. As the price of BTC declined, Celsius was required to provide additional collateral to Tether. Celsius claims that Tether unjustly liquidated its borrowing position and failed to give it the opportunity to supply additional collateral.
In taking the matter to court, the company has accused Tether of being at fault. Celsius has initiated a $3.5 billion compensation lawsuit against the largest stablecoin issuer by market capitalization.
Tether Responds: “Blackmail”
Tether, the company behind the USDT, which is a key player in the cryptocurrency industry, described Celsius’s legal move as an act of blackmail based on unfounded claims.
The stablecoin company insists that it acted in accordance with the terms of the 2022 agreement, which required Celsius to send additional BTC as collateral when the price of BTC fell. Tether has announced that it will fight the allegations in court and has communicated its intention to prepare a robust defense.
Details of the Lawsuit
The lawsuit filed in the U.S. Bankruptcy Court for the Southern District of New York addresses the unjust liquidation of Celsius by Tether two years ago during its bankruptcy process. Through this lawsuit, Celsius aims to recover $2.4 billion worth of BTC along with legal and filing fees from Tether.
In response to the lawsuit, Tether stated on its website: “No good deed goes unpunished.” The company also expressed its readiness to challenge what it calls a fabricated, meritless claim that will benefit no one other than the lawyers, bankers, and consultants who initiated this lawsuit.
