Celsius Sues Tether for $2.4B in Bitcoin, Tether Calls Case a "Shakedown"

Celsius Network Ltd., a bankrupt crypto lender, has filed a lawsuit against Tether Ltd., seeking to recover $2.4 billion in Bitcoin. The lawsuit, filed in federal bankruptcy court, alleges that Tether liquidated Bitcoin collateral when Celsius failed to meet its obligations, resulting in fraudulent transfers of over $2 billion in Bitcoin. Celsius claims that Tether's actions during the ninety-day period leading up to its bankruptcy filing in July 2022 were influenced by a "Preferential Application Transfer," allowing Tether to secure its position at the expense of other creditors.

Tether, the issuer of the stablecoin USDT, has refuted these allegations, calling the lawsuit baseless. Tether argues that its financial position remains strong and assures that USDT holders will not be affected. The company asserts that the liquidation of Bitcoin was in accordance with their agreement, covering Celsius’s outstanding loan. Tether's CEO, Paolo Ardoino, has described the lawsuit as "shake down" litigation and stated that the firm plans to defend itself in court. The exact amount Celsius seeks in damages appears to vary, with some reports indicating it could be as high as $3.5 billion, including returns, damages, and legal fees.