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Celsius lawsuit against Tether is back in the spotlight after a major court decision this week.
A U.S. bankruptcy judge ruled that Celsius Network’s billion-dollar claims can move ahead. The lawsuit accuses Tether of breaching contracts, violating fair dealing, and executing a “fire sale” of Bitcoin collateral during Celsius’s collapse.
The crypto lender claims Tether liquidated over 39,500 BTC in June 2022 without following agreed-upon procedures. This move, Celsius argues, cost them over $4 billion based on current BTC prices. The average price during the sale was around $20,656—below market at the time. These allegations form the core of the Celsius lawsuit against Tether.
The court found Celsius had enough grounds to proceed. While some claims were dismissed, the judge allowed breach of contract and fraudulent transfer allegations to continue. Tether had tried to dismiss the case entirely, claiming U.S. courts lacked jurisdiction and the accusations weren’t valid.
Judge rules Celsius lawsuit against Tether is domestic in nature
Celsius argues that Tether’s actions were domestic, involving U.S.-based staff, communications, and bank accounts. This argument helped defeat Tether’s claim that the suit applied U.S. laws extraterritorially. The court agreed that key events occurred in the U.S., giving it the authority to hear the case.
The alleged misconduct surrounds a margin call Tether issued as Bitcoin’s price fell. Celsius says Tether jumped the gun, selling BTC before a 10-hour wait expired. The proceeds were reportedly moved to Bitfinex, Tether’s sister platform, sparking accusations of preferential treatment.
At the time, Celsius owed Tether $812 million. Tether’s liquidation actions allegedly aimed at recouping that debt quickly. The Celsius lawsuit against Tether also claims that Tether’s moves were meant to benefit itself, not protect lender interests.
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Fallout from the Celsius bankruptcy keeps unfolding
Celsius, once a major crypto lender, exited bankruptcy in January 2024 after 18 months of restructuring. The company is now repaying creditors. Meanwhile, Tether’s CEO, Paolo Ardoino, recently denied any IPO plans despite speculation. He even claimed Tether’s valuation might exceed $500 billion.
The lawsuit adds pressure as Tether expands its Bitcoin holdings. It now owns a major stake in Twenty One Capital, the third-largest corporate BTC holder. Tether transferred over 37,000 BTC, worth $3.9 billion, to addresses linked to the platform. These moves raise further questions about its role in the crypto ecosystem.
The Celsius lawsuit against Tether could shape how crypto lenders and collateral management operate in the future. With U.S. courts taking jurisdiction seriously, more international crypto disputes may find legal footing in American courts.
