Tether, the issuer of the world’s largest stablecoin USDT, has vehemently denied allegations made by Celsius Network in a recently filed lawsuit. The embattled crypto lender is seeking a staggering $2.4 billion in Bitcoin restitution, claiming Tether improperly liquidated its collateral.
The legal showdown between these two crypto behemoths centers around a 2022 agreement where Celsius borrowed USDT from Tether, using Bitcoin as collateral. When the price of Bitcoin plummeted, Celsius failed to meet its margin call obligations, prompting Tether to liquidate the pledged Bitcoin in accordance with the contract terms.
Tether has branded the lawsuit a “shakedown” attempt by Celsius to deflect blame for its own financial mismanagement. The company insists it acted strictly within the terms of the agreement and that its actions were necessary to protect the interests of USDT holders.
Tether CEO Paolo Ardoino has been vocal in defending the company’s position, emphasizing its strong financial standing and dismissing the lawsuit as a misunderstanding of basic risk management principles. He has assured USDT holders that the legal battle will not impact the stability of the stablecoin.
Also Read: Tether Mints $1.3B USDT – Bitcoin on Verge of 21% Rally to $65K?
Celsius, once a prominent crypto lender, filed for bankruptcy in 2022 amidst a market downturn. The company recently emerged from bankruptcy after distributing billions in crypto and cash to creditors. As part of its restructuring, Celsius established a Bitcoin mining company, Ionic Digital, which has already mined a substantial amount of Bitcoin.
The legal dispute between Tether and Celsius is likely to unfold over the coming months, with far-reaching implications for the cryptocurrency industry. The outcome of the case could set a precedent for future legal battles involving crypto lending platforms and their creditors.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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