Stablecoin juggernaut Tether has called a lawsuit from Celsius Network a “shakedown” and “baseless”. Tether is the company behind leading stablecoin, USDT.
JUST IN: Celsius has filed a massive lawsuit against Tether, demanding over $2.4 billion worth of #Bitcoin.#Celsius claims #Tether breached its token agreement with Celsius when it applied the company’s property (Bitcoin) held as collateral to pay itself for Celsius’s… pic.twitter.com/M88kvebe2R
— Jacob King (@JacobKinge) August 10, 2024
The suit was filed on Friday (August 9) in the U.S. Bankruptcy Court for the Southern District of New York. It seeks to recover around $2.4 billion in Bitcoin. Former crypto lending platform Celsius claims it was wrongfully liquidated by Tether before its bankruptcy in July 2022.
Tether Says Its Liquidation Of Celsius’ Bitcoin Was Done Under Direction From The Crypto Lender
On Saturday (August 10), Tether posted an article to its website, responding to the claim. The stablecoin company says, “The claims arise out of a 2022 agreement under which Tether made USDT available to Celsius in amounts that Celsius requested at the time.
Under the agreement, Celsius posted bitcoin (BTC) to Tether as collateral. As the price of BTC began to fall in June 2022, the agreement required Celsius to post additional collateral to avoid the liquidation of its BTC.
When Celsius chose not to post additional BTC it directed Tether to liquidate the BTC collateral Tether held to close out its roughly 815 million USDT position with Tether.”
Tether then says that Celsius is attempting to impose its costs of failure and mismanagement on them. It also reiterates that the BTC was liquidated in the direction of Celsius.
Stablecoin Issuer Vows To Fight Claims In Court, Promises Investors That They Won’t Be Affected
Tether finished its statement on the attack. It has promised to fight the ‘shakedown’ in court. “We look forward to responding in court to this contrived, meritless shakedown that will benefit nobody other than the lawyers, bankers and consultants involved in bringing this case.”
The company also assured investors that USDT holders will not be affected by the case and that it remains in an incredibly strong financial position, with $12 billion in consolidated equity as of June 30, 2024.
Celsius’ Side Of The Story
Tether violated their own terms of service.
Tethers terms of service in 2022 explicitly state that they will not print Tethers in exchange for Bitcoins.
Except they did in fact print Tethers for Bitcoin, for Celsius.
Tether is the lead shareholder in the Celsius Ponzi scheme.… pic.twitter.com/cbf4Gd054b
— Bitfinex'ed 🔥🐧 Κασσάνδρα 🏺 (@Bitfinexed) August 10, 2024
On the other hand, Celsius is claiming that Tether did not adhere to the contractually agreed-upon 10-hour window to make the deposit for collateral.
The crypto lender filed for Chapter 11 bankruptcy in July 2022. It argues that “Tether forged ahead with an improper application of 39,542.42 Bitcoin,” destroying Celsius’s residual interest in the collateral.
Celsius’s claim of $2.4 billion stems from the current value of Bitcoin’s price.
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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
