Tether Limited Responds to Celsius Network Lawsuit
Tether Limited, the issuer of the leading stablecoin USDT, has firmly rejected a lawsuit brought against it by Celsius Network Limited. In a statement released on Saturday, Tether accused the now-defunct crypto lender of attempting to deflect responsibility for its financial difficulties, labeling the lawsuit as “baseless” and a clear example of a “meritless shakedown.”
Details of the Lawsuit
The lawsuit was filed on August 9 in the United States Bankruptcy Court for the Southern District of New York and centers around a disagreement stemming from a 2022 agreement. Celsius alleges that Tether improperly liquidated approximately $2.4 billion worth of Bitcoin (BTC) collateral in June 2022. The company claims that this liquidation was unwarranted and is now seeking the return of the BTC that was liquidated. However, Tether contends that the liquidation occurred under “Celsius’ direction and with Celsius’ consent at June 2022 prices.”
Background of the Dispute
In 2022, as part of their agreement, Tether provided USDT to Celsius, which subsequently filed for bankruptcy in July 2022. In exchange, Celsius offered Bitcoin as collateral. As Bitcoin prices began to decline sharply in June 2022, Celsius encountered a margin call. According to the terms of the agreement, Celsius was obligated to provide additional collateral to prevent the liquidation of its BTC held by Tether.
Tether claims that Celsius “chose” not to supply further collateral and instead “directed” Tether to liquidate its BTC collateral to settle its approximately 815 million USDT position with Tether.
Tether’s Position
Tether characterized the lawsuit as a clear “misapplication of the law” and asserted that it overlooks the “actual facts” surrounding the original agreement. The company also indicated that the lawsuit aims to shift the consequences of Celsius’ failure onto Tether by retroactively imposing costs for decisions made by Celsius during a period of financial turmoil.
The press release stated: “Rather than acknowledge the clear validity of the agreement established years prior to Celsius’ bankruptcy, this lawsuit seeks to inappropriately transfer the costs of Celsius’ mismanagement and failure onto Tether.”
Tether has committed to “vigorously defend” itself in court and anticipates a favorable outcome. The statement concluded: “Tether will never become a victim of shameless litigation money grabs.”
