Tether Slams Celsius Network’s $2 Billion Lawsuit as Groundless

Tether Holdings Ltd., the issuer of the world's largest stablecoin, has strongly refuted claims made by the bankrupt crypto lender Celsius Network. Celsius alleges that Tether illegally liquidated $2 billion worth of bitcoin (BTC) held as collateral. Tether describes the lawsuit, filed in the United States Bankruptcy Court, as an attempt to shift the blame for Celsius' own financial mismanagement onto Tether.

Tether’s Defence

In a statement issued on 10 August, Tether labelled the lawsuit as "shameless litigation" and expressed confidence in a favourable court outcome. Celsius Network is demanding that Tether return $2 billion in BTC, which they claim was lost due to fraudulent transfers. The dispute centres on the sale of 39,542.42 BTC, which Celsius alleges was conducted under questionable circumstances.

Details of the Collateral Agreement

According to the terms of their agreement, Celsius was required to post BTC as collateral for loans from Tether. The agreement stipulated that if the value of the BTC fell below a certain level, Celsius was supposed to provide additional collateral within 10 hours. Celsius argues that Tether’s liquidation of the BTC violated these terms and constituted a fraudulent transfer, contrary to bankruptcy regulations.

Tether’s Counterclaims

Tether argues that Celsius failed to post the necessary additional collateral to cover its $815 million USDT position. The stablecoin issuer asserts that the BTC was liquidated with Celsius' consent at June 2022 prices. Tether criticises the lawsuit as a misapplication of the law and questions the jurisdiction of the claims.

Impact on USDT Holders

Tether reassured its users that, should Celsius prevail in court, the stablecoin’s financial stability is robust enough to protect token holders from any adverse effects.