Tether will have to defend itself in court after a U.S. bankruptcy judge allowed key parts of Celsius Network’s lawsuit to proceed.
The now-restructured crypto lender accuses Tether of mishandling collateral during its 2022 collapse, triggering a controversial liquidation that Celsius says cost them billions.
At the heart of the case is a June 2022 margin call, during which Tether allegedly sold over 39,000 BTC below market value—before the end of an agreed waiting period—and applied the proceeds to Celsius’s $812 million debt. Celsius claims this violated their loan agreement and amounted to a bad-faith, self-serving move, as the funds were reportedly routed to Bitfinex, a Tether affiliate.
Tether pushed to dismiss the case, citing jurisdictional issues and claiming the lawsuit was legally insufficient. But the judge found that enough of the alleged misconduct happened on U.S. soil to warrant a trial, particularly given the use of U.S.-based personnel and accounts.
The court threw out several minor charges but upheld the main ones: breach of contract, fraudulent transfer, and preferential treatment in the lead-up to Celsius’s bankruptcy. If proven, these could allow Celsius to reclaim part of what it says is a $4 billion loss at today’s prices.
Celsius exited bankruptcy earlier this year and is actively repaying creditors. Tether, meanwhile, continues expanding its influence, most recently making large Bitcoin transfers tied to its growing crypto holdings.
Alexander Stefanov
Reporter at Coindoo
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over 8 years of experience covering the crypto, blockchain and fintech industries, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics.
Source: https://coindoo.com/judge-clears-celsius-lawsuit-against-tether-to-move-forward/