Celsius Network, the defunct cryptocurrency company and Bitcoin mining firm, has filed a lawsuit demanding $3.4 billion in bitcoin from Tether. The suit alleges the stablecoin issuer of misappropriating assets provided as collateral for a loan availed by Celsius.
In the suit, Celsius claimed it provided 39,542.42 Bitcoin to Tether as collateral for a loan it availed in the stablecoin issuer’s USDT and EURT tokens. However, bitcoin’s value dropped during the previous bear market, pushing Tether to ask more BTC to collateralize the loan appropriately.
At this point, Celsius claims Tether sold off the bitcoin collateral unwarranted, for which it now seeks damages. In the lawsuit, Celsius maintains, “Tether took steps to insulate itself from the effect of bankruptcy. Specifically, on several occasions, Tether demanded, and received, a significant amount of new, incremental collateral to improve its position in the impending bankruptcy. That is, Plaintiffs transferred 15,658.21 Bitcoin to Defendants to satisfy these demands, each inherently on account of antecedent debt.”
The defunct firm continued to mention that it provided additional collateral to match the loan and more to borrow even more stablecoins. Continued dips in bitcoin prices caused Tether to demand more, which was the final time. Celsius claimed that it had 10 hours to honor the demand. However, Tether had sold off the collateralized bitcoin before it could provide more.
Celsius feels Tether violated the terms of their contract and caused it to lose out on the increment bitcoin’s value has witnessed. It seeks to retrieve this value from the stablecoin issuer to assist in its bankruptcy proceedings.
On the other hand, Tether called these accusations bogus. In a recent blog, the company behind the largest stablecoin mentioned, “This baseless lawsuit against Tether proves the adage that “no good deed goes unpunished.”” It added, “As we’ve said many times, Tether will never fall prey to shameless litigation money grabs. We will vigorously defend ourselves against the unwarranted allegations made against us, and we expect to prevail in this litigation.”
Tether has made it clear that it did not violate the contract’s terms and sold off the assets upon receiving the go-ahead from Celsius. Moreover, it assured holders of its stablecoins that their value is safe in the hands of the company “even in the most remote scenario in which this baseless lawsuit will get somewhere.”
Source: https://www.livebitcoinnews.com/celsius-is-suing-tether-asking-3-4-billion-worth-of-bitcoin/