Tether to Defend Against Celsius’ $2.4 Billion Lawsuit

On
August
9,
2024,
Celsius
Network
Limited,
through
the
Blockchain
Recovery
Investment
Consortium,
LLC,
initiated
a
$2.4
billion
lawsuit
against
Tether
Limited
and
its
affiliates
in
the
United
States
Bankruptcy
Court
for
the
Southern
District
of
New
York,
according
to

tether.io.

Details
of
the
Lawsuit

The
lawsuit
stems
from
a
2022
agreement
where
Tether
provided
USD₮
to
Celsius,
backed
by





Bitcoin
(BTC)
collateral.
As
BTC’s
price
plummeted
in
June
2022,
Celsius
was
required
to
post
additional
collateral
to
avoid
liquidation.
When
Celsius
failed
to
do
so,
they
instructed
Tether
to
liquidate
the
BTC
collateral,
closing
out
an
approximately
$815
million
position.

Celsius’
lawsuit
now
seeks
the
return
of
$2.4
billion
worth
of
BTC,
despite
the
liquidation
occurring
at
Celsius’
direction
and
with
their
consent
at
June
2022
prices.
Tether
has
labeled
the
lawsuit
as
baseless,
highlighting
that
the
agreement
was
made
long
before
Celsius’
bankruptcy
and
that
the
claims
attempt
to
shift
the
costs
of
Celsius’
mismanagement
onto
Tether.

Tether’s
Response

Tether
has
stated
that
the
lawsuit
is
undermined
by
the
actual
facts
of
the
agreement,
misapplies
the
law,
and
overlooks
numerous
defenses.
Tether
is
prepared
to
contest
the
claims
in
court,
describing
the
litigation
as
a
meritless
shakedown.

Tether
emphasized
its
robust
financial
standing,
noting
that
its
consolidated
equity
was
nearly
$12
billion
as
of
June
30,
2024.
The
company
also
highlighted
its
ongoing
profitability,
asserting
that
even
if
the
claims
were
valid,
they
would
not
affect
Tether
token
holders.

Market
Impact

This
legal
battle
comes
at
a
time
when
the
cryptocurrency
market
is
closely
watching
regulatory
and
legal
developments.
Tether’s
commitment
to
defending
itself
could
set
a
precedent
for
how
similar
cases
are
handled
in
the
future.

As
the
situation
unfolds,
market
participants
will
be
keenly
observing
the
court’s
decisions
and
their
potential
implications
for
both
companies
involved
and
the
broader
crypto
ecosystem.

Image
source:
Shutterstock