In a dramatic legal escalation, bankrupt cryptocurrency lender Celsius Network has filed a lawsuit against Tether, alleging the stablecoin issuer misappropriated approximately $3.5 billion worth of Bitcoin. The suit, filed in a Delaware bankruptcy court, marks a significant escalation of tensions between two major players in the cryptocurrency ecosystem.
At the heart of the dispute is a claim that Tether liquidated Celsius’ Bitcoin collateral at a significantly undervalued price during the lender’s bankruptcy proceedings. Celsius alleges that Tether violated the terms of their agreement by liquidating the collateral without providing Celsius with an opportunity to post additional collateral to avoid liquidation.
The lawsuit seeks the return of approximately 57,428.64 Bitcoin, or its equivalent in fiat currency, along with damages and legal fees. This amount surpasses the previously reported figure of $2.4 billion, which was based on a calculation involving a smaller portion of the collateral.
Tether has vehemently denied Celsius’ allegations, characterizing the lawsuit as a “shake down” attempt. The stablecoin issuer maintains that Celsius initiated the liquidation by failing to meet its collateral obligations.
Tether emphasized that the liquidation was conducted in accordance with the terms of the agreement between the two companies. Additionally, the company reassured USDT holders that their funds are safe and unaffected by the lawsuit.
The legal battle between Celsius and Tether underscores the complexities and risks associated with lending and borrowing within the cryptocurrency ecosystem. As the industry continues to mature, such disputes are likely to become more common, highlighting the need for clear and enforceable contracts.
The outcome of the lawsuit could have far-reaching implications for the cryptocurrency market. If Celsius prevails, it could set a precedent for how collateralized loans are handled in bankruptcy proceedings. Conversely, a victory for Tether could strengthen the position of stablecoin issuers and provide greater legal clarity for the industry.
The legal dispute between Celsius and Tether represents a high-stakes battle between two major players in the cryptocurrency ecosystem. The outcome of the lawsuit will have significant implications for the industry as a whole, impacting investor confidence and shaping the future of lending and borrowing practices within the digital asset space.
As the case unfolds, it is essential for market participants to closely monitor developments and assess the potential impact on the broader cryptocurrency market.
