According to the latest development, bankrupt cryptocurrency lender Celsius has filed a lawsuit against USDT issuer Tether and is demanding the return of $2.4 billion worth of Bitcoin.
Tether has announced its intention to defend itself against a lawsuit filed by Celsius through the Blockchain Recovery Investment Consortium. The lawsuit was filed in the United States Bankruptcy Court for the Southern District of New York on August 9, 2024.
Tether denounced the lawsuit as “baseless” and a clear example of the adage “no good deed goes unpunished.” The dispute stems from a 2022 agreement in which Tether provided USD₮ to Celsius, which sent Bitcoin (BTC) as collateral.
As the value of BTC plummeted in mid-2022, the agreement required Celsius to post additional collateral to prevent liquidation. Celsius chose not to do so, directing Tether to liquidate the BTC to close its $815 million position with Tether.
According to Tether, Celsius is attempting to shift the blame for its own financial mismanagement onto Tether by seeking the return of approximately $2.4 billion worth of BTC, despite the fact that the liquidation was carried out at Celsius’ own direction and consent. Tether argues that the lawsuit misrepresents the agreement and legal context, ignores its key defenses, and raises significant jurisdictional issues.
*This is not investment advice.