As a seasoned researcher with years of experience in following the twists and turns of the cryptocurrency market, I must say that the ongoing legal battles within this sector are as exciting as they are perplexing. The latest lawsuit filed by Celsius against Tether is yet another intriguing chapter in this saga.
Bankrupt crypto lender Celsius has sued Tether, alleging that they misused assets. This legal action is part of an effort by Celsius, which filed for bankruptcy in 2022, to recover billions of dollars to repay its creditors.
Why Celsius Is Requesting Over $3.5 Billion From Tether
In the past few weeks, the bankrupt cryptocurrency platform Celsius has taken multiple lawsuits against several digital currency companies. The latest entity to be included in these legal disputes is Tether, a prominent stablecoin company. Other firms currently entangled in legal conflicts with the collapsed crypto lender include Badger DAO, Bancor, and Compound.
On August 9th, I find myself engaged in a significant legal battle, as Celsius has filed a lawsuit against Tether. The crux of our claim involves billions of dollars worth of Bitcoin returns, damages, and legal expenses. As per the latest court documents, we are demanding the return of 39,542 Bitcoins that served as collateral for loans we received from Tether.
In early 2022, as Bitcoin’s price started dropping, it was reported that Tether asked for more collateral from Celsius to secure their loans. Additionally, court documents suggest that Celsius had borrowed an extra $300 million in Tether (USDT) around a few months prior to filing for bankruptcy in July.
In the timeframe of May to June 2022, Celsius fulfilled multiple requests for extra security by transferring additional BTC as collateral. After this transaction, Tether issued another demand for collateral but opted to liquidate Celsius’s security before the required ten-hour hold period had ended.
In the legal dispute, Celsius claims that Tether sold the security used as collateral at an unfair price, favoring the stablecoin provider, while denying Celsius the chance to add more collateral as a lender. This is outlined in their court document.
If granted the chance, Celsius could’ve fulfilled its collateral demand (a right it held), potentially avoiding the sale of its Bitcoin when the cryptocurrency market was at a low point. However, it ended up selling the Bitcoin, primarily to advantage a single creditor – Tether.
As per court documents, Celsius is seeking the court’s permission for Tether to return a total of approximately 57,428.64 Bitcoins (equivalent to about $3.5 billion at current Bitcoin prices) that were preferentially transferred by Celsius to Tether. These transfers include 15,658.21 Bitcoin, 2,228.01 Bitcoin, and 39,542.42 Bitcoin.
Tether Labels Lawsuit A ‘Shakedown’
In their latest blog update, Tether firmly refutes accusations of misconduct towards Celsius, labeling the ongoing lawsuit as unfounded. The stablecoin firm alleges that Celsius is overlooking the undeniable legitimacy of the contract they had established long before its financial distress.
Tether said in the blog post:
Anticipating our turn to address the court on this manufactured, baseless lawsuit that seems to only serve the interests of the legal professionals, financial advisors, and consultants associated with it.
In a recent post on the X platform, Tether CEO Paolo Ardoino emphasized once more that the company stands ready to demonstrate bold financial tactics in legal settings.
In the year 2022, Tether offered USDt to certain clients such as Celsius. The dealings between Tether and its clients are straightforward: Tether lends USDt to chosen clients who pledge more than enough Bitcoin as collateral for these loans.
If the price of bitcoin (the collateral) falls…
— Paolo Ardoino (@paoloardoino) August 10, 2024
In the end, Ardoino swiftly addressed Tether’s $12 billion combined equity and provided comfort to USDT holders, stating that even in the unlikely event that the lawsuit intensifies, their assets would remain unaffected.
Read More
- LUNC PREDICTION. LUNC cryptocurrency
- BTC PREDICTION. BTC cryptocurrency
- SOL PREDICTION. SOL cryptocurrency
- BICO PREDICTION. BICO cryptocurrency
- USD ZAR PREDICTION
- USD COP PREDICTION
- USD PHP PREDICTION
- VANRY PREDICTION. VANRY cryptocurrency
- USD CLP PREDICTION
- EUR RUB PREDICTION
2024-08-11 13:12