Celsius Network Granted Right to Sue Tether
A US bankruptcy court has approved Celsius Network’s request to proceed with its legal action against Tether, the issuer of the leading stablecoin, USDT.
Celsius Claims ‘Fire Sale’ of Bitcoin
In its court filing, Celsius alleges that it was preparing Bitcoin (BTC) to satisfy a collateral obligation when representatives from Tether demanded immediate payment. This insistence prompted what Celsius characterizes as a “fire sale” of its Bitcoin holdings, leading to the liquidation of 39,542.42 BTC. These assets were transferred to Tether as collateral within the 90 days prior to Celsius declaring bankruptcy, which included several “top-up transfers” and additional collateral for loans. The lawsuit indicates that Celsius is seeking the return of nearly 57,428.64 BTC, valued at around $4 billion, along with a claim for $100 million in damages due to breach of contract. However, there is a significant inconsistency in the valuation of these transactions; while Celsius demands the full amount, Tether’s communications indicate a value closer to $2.4 billion.
Is Tether Preparing Its Defense?
Celsius’s legal stance suggests that Tether’s actions constitute a larger scheme aimed at exploiting the US cryptocurrency market, which they believe could justify jurisdiction for the case. Furthermore, Celsius argues that the transfers to Tether were preferential and warrant examination under bankruptcy regulations. They assert that Tether received more than it would have in a Chapter 7 bankruptcy scenario, thus creating a preference claim. Tether has previously dismissed the lawsuit as a mere “shake down,” asserting that it was Celsius’s responsibility to provide additional collateral as Bitcoin prices varied. Tether maintains that their requests were valid and that the financial mismanagement by Celsius should not lead to additional burdens on them. In a recent social media post, Tether CEO Paolo Ardoino shared a video featuring a gladiator in a combat setting, suggesting that the company is ready to mount a defense against Celsius’s allegations, which could lead to an extended legal battle. However, an official statement from Tether on the situation is yet to be released.
Bitcoin Price Surges Towards Record High
On a broader note, the cryptocurrency market cap stands at $3.32 trillion. Bitcoin has seen a notable price surge, approaching its all-time high of $111,800, achieved in mid-May of this year. Currently, Bitcoin is trading at $108,689, reflecting a 3% increase over the past 24 hours. Earlier on Wednesday, BTC reached a three-week peak of $109,800 but faced resistance at the $110,000 level, preventing it from breaking through.
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