The shuttered crypto exchange accuses Tether of illegally liquidating funds
Celsius, the now-defunct cryptocurrency exchange, has launched a lawsuit against Tether, seeking a total of $3.5 billion. The lawsuit, filed during Celsius’ bankruptcy proceedings, revolves around a dispute over Bitcoin (BTC) collateral that Tether allegedly liquidated.
The core of the lawsuit is Celsius’ claim that Tether misappropriated assets by selling off 57,428.64 BTC in collateral at a time when the price of Bitcoin was dropping. Celsius had borrowed a substantial amount of Tether’s USDT stablecoin and, in return, provided Tether with 39,542.42 BTC as collateral. According to the agreement between the two parties, Celsius was required to provide additional collateral if Bitcoin’s price fell to avoid liquidation.
Celsius argues that Tether acted prematurely by selling the Bitcoin collateral without allowing Celsius the opportunity to provide additional funds. The lawsuit also includes a demand for damages and legal fees, with Celsius asking for the return of the liquidated Bitcoin or its equivalent value, which amounts to about $3.48 billion as of August 10. Additionally, the lawsuit seeks no less than $100 million in damages, plus further damages to be determined at trial.
In response, Tether has strongly denied the allegations, dismissing the lawsuit as baseless and describing it as a “shakedown.” The company asserts that the liquidation was carried out at Celsius’ own request when the exchange chose not to provide the required additional collateral. Tether has vowed to defend itself against the claims and reassured its USDT holders that the lawsuit will not impact them, citing its robust financial position.
