Tether settles $299.5M with Celsius bankruptcy estate

Key Takeaways

What was the Tether–Celsius settlement about?

Tether agreed to pay $299.5 million to the Celsius bankruptcy estate, resolving claims from its 2022 collapse.

Why does this matter for creditors and the market?

The deal, led by BRIC and backed by VanEck, marks one of Celsius’s largest recoveries.

Tether has agreed to pay $299.5 million to the Celsius Network bankruptcy estate. The payment resolves a long-running lawsuit over crypto collateral liquidations made before Celsius’s 2022 collapse.

The settlement was announced on 14 October by the Blockchain Recovery Investment Consortium (BRIC) — a joint venture between GXD Labs (an affiliate of Atlas Grove Partners) and VanEck, which manages more than $161.7 billion in assets. 

Furthermore, the agreement closes an adversary proceeding filed in August 2024 in the U.S. Bankruptcy Court for the Southern District of New York.

Celsius’ Tether lawsuit targeted pre-bankruptcy transfers

The Celsius estate sued Tether last year. The suit alleged that the stablecoin issuer improperly liquidated collateral tied to margin loans.

This was in the weeks leading up to the crypto lender’s insolvency. 

Court documents claimed those transactions breached U.S. bankruptcy rules governing “preferential” and “fraudulent” transfers. This allowed Tether to recover assets at the expense of Celsius creditors.

The lawsuit became one of the largest outstanding disputes in the Celsius wind-down process.

BRIC, which was appointed Complex Asset Recovery Manager and Litigation Administrator in January 2024, led negotiations on behalf of the estate.

“We are pleased to have resolved Celsius’s adversary proceeding and related claims against Tether,” said David Proman, Managing Partner of GXD Labs. “In addition, we are pleased with the timeliness with which the settlement was achieved.”

VanEck-backed consortium driving creditor recoveries

Formed in early 2023, the Blockchain Recovery Investment Consortium specializes in recovering illiquid or disputed digital-asset holdings from bankrupt estates. 

Also, beyond the Tether case, BRIC continues to manage a portfolio of illiquid tokens and litigation assets on behalf of Celsius creditors.

Additionally, the settlement marks one of the largest recoveries secured through BRIC to date, underscoring VanEck’s deeper push into blockchain-asset recovery and distressed-asset management.

Significance for the stablecoin sector

While the settlement does not imply wrongdoing, it highlights Tether’s ongoing legal exposure within major crypto bankruptcies such as Celsius, Three Arrows Capital, and FTX. 

Also, the payment brings Celsius one step closer to completing its long-running wind-down.