Caroline Bishop
10 Aug 2024 15:51
Tether is being sued by Celsius Network for $2.4 billion over a 2022 contract, and has vowed to defend itself in court.
According to tether.io, on August 9, 2024, Celsius Network Limited, through Blockchain Recovery Investment Consortium, LLC, filed a $2.4 billion lawsuit against Tether Limited and its affiliates in the U.S. Bankruptcy Court for the Southern District of New York.
Details of the lawsuit
The lawsuit stems from a 2022 contract in which Tether provided USD₮ to Celsius. Bitcoin (BTC) Collateral. When the price of BTC crashed in June 2022, Celsius was forced to post additional collateral to avoid liquidation. When Celsius failed to do so, it instructed Tether to liquidate its BTC collateral, liquidating approximately $815 million worth of positions.
Celsius’ lawsuit now seeks the return of $2.4 billion worth of BTC, despite the liquidation being conducted at Celsius’ direction and consent at June 2022 prices. Tether has called the lawsuit baseless, stressing that the settlement was reached long before Celsius went bankrupt, and that the claim is an attempt to shift the costs of Celsius’ mismanagement onto Tether.
Tether’s response
Tether says the lawsuit undermines the facts of the contract, misapplies the law, and ignores numerous defenses. Tether is prepared to challenge the claims in court and describes the lawsuit as a pointless threat.
Tether highlighted its strong financial position, noting that its consolidated capital would be nearly $12 billion as of June 30, 2024. The company also emphasized its continued profitability, and argued that even if the claims were valid, it would not impact Tether token holders.
Market impact
This legal battle comes at a time when the cryptocurrency market is closely watching regulatory and legal developments, and Tether’s willingness to defend itself could set a precedent for how similar cases are handled in the future.
As the situation unfolds, market participants will be closely watching the court’s ruling and its potential impact on the companies involved and the broader cryptocurrency ecosystem.
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