Legal battle intensifies as Celsius seeks $3.3B in damages, accusing Tether of wrongful liquidation and fraud.
Tether Limited has recently found itself in the middle of a legal battle with Celsius Network, a bankrupt crypto lender. The dispute revolves around a 2022 agreement and the subsequent liquidation of Bitcoin (BTC) collateral. Here's a breakdown of the situation and what it means for both parties involved.
The core of the conflict lies in Celsius Network's claim that Tether wrongfully liquidated approximately $2.4 billion worth of BTC collateral. According to Celsius, this action was not justified under the terms of their agreement. However, Tether argues that the liquidation was carried out with Celsius' direction and consent, following a failure to meet a margin call by not providing additional collateral.
Tether has dismissed the lawsuit as "baseless" and claims that it misapplies the law and ignores the facts of the agreement. Tether asserts that the liquidation was a necessary step due to Celsius' inability to meet the margin call requirements. The company has vowed to vigorously defend itself in court, maintaining that their actions were in compliance with the agreed terms.
On the other side, Celsius is seeking $3.3 billion in damages, which is equivalent to 57,428.64 bitcoin. Celsius has accused Tether of fraud in the loan agreement and has labeled the liquidation as wrongful. The lawsuit, filed in a U.S. Bankruptcy Court, aims to recover the substantial amount Celsius claims was wrongfully taken from them.
Despite the ongoing legal battle, Tether has assured its token holders that the lawsuit will not impact them. Tether, the issuer of the world's largest stablecoin USDT, remains confident in its position and is prepared to fight the allegations in court. The company has labeled the lawsuit as a "shakedown" and is determined to prove its case.
