Bankrupt cryptocurrency lender Celsius filed a lawsuit against USDT issuer Tether in 2024, demanding the return of $2.4 billion worth of Bitcoin.
The dispute between Celsius and Tether dates back to a 2022 agreement in which Tether provided USDT to Celsius, which sent Bitcoin (BTC) as collateral.
Tether argues that Celsius is attempting to shift the blame for his own financial mismanagement onto Tether by requesting the return of approximately $2.4 billion worth of BTC (as of the date of the lawsuit), despite the liquidation being carried out at his direction and with his consent.
While the case is ongoing, the US bankruptcy court allowed Celsius’ $4 billion (the current value of BTCs) BTC liquidation lawsuit against Tether to continue.
At this point, the US bankruptcy judge rejected significant parts of Tether’s motion to dismiss the case and related motions. The judge also rejected Tether’s motion to dismiss the case.
Celsius alleges in the lawsuit that Tether improperly liquidated more than 39,500 BTC during the crypto lender’s collapse in 2022, violating contract terms and U.S. bankruptcy law. Celsius alleges that Tether panic-sold bitcoins before the required legal deadline, selling them for less than their value and without Celsius’ approval.
*This is not investment advice.