The crypto world is no stranger to controversy, but the latest clash between Celsius and Tether has grabbed significant attention. Celsius, the bankrupt crypto lender, has filed a lawsuit accusing the stablecoin issuer of fraudulently liquidating Bitcoin worth $2.4 billion. The lawsuit argues that Bitcoin was hastily sold at a low price, worsening Celsius’s financial woes as it neared bankruptcy. The drama is unfolding in court, where CEO Paolo Ardoino has dismissed the allegations as baseless.
Celsius Targets Tether in Bitcoin Dispute
Celsius’s lawsuit marks a significant chapter in the ongoing crypto drama. The lender claims that Tether breached its contract by liquidating over 39,000 Bitcoin in a rushed manner. According to Celsius, this move robbed them of their assets at a critical moment, pushing them further into financial trouble. Tether, however, strongly denies these accusations. The company argues that it acted within its rights and followed standard procedures in response to market conditions. The outcome of this legal battle could set a precedent for how similar disputes are handled in the crypto industry.
Tether Denies Fraud Allegations
Tether has not taken Celsius’s accusations lightly. Paolo Ardoino, the CEO, has been vocal in defending the company’s actions, revisiting the events of 2022 to clarify what transpired. He explained that the firm had provided USDT to Celsius, backed by overcollateralization in Bitcoin as part of a risk management strategy. According to Ardoino, when Bitcoin prices plunged in 2022, Celsius requested the sale of its BTC held as collateral. The stablecoin issuer acted according to the contract terms, liquidating the collateral as agreed. Ardoino describes the lawsuit as a “shakedown” and insists that the company did nothing wrong, vowing to fight the case in court with strong support from the crypto community.
In 2022, Tether made available USDt to some of its customers – including Celsius. Tether’s arrangements with customers are very simple: Tether provides USDt to selected customers who provide an overcollateralization in Bitcoin.
If the price of bitcoin (the collateral) falls… https://t.co/UuEs1ig8zr
— Paolo Ardoino 🤖🍐 (@paoloardoino) August 10, 2024
Celsius’s Broader Legal Campaign
The lawsuit against Tether is just one part of Celsius’s broader legal strategy. The bankrupt lender has launched multiple lawsuits against other crypto entities, including Badger DAO and Compound Labs, in an attempt to recover funds for its creditors. Each lawsuit involves complex claims of mismanagement and fraud, with Celsius seeking to claw back millions of dollars. However, Tether remains the primary target, given the sheer scale of the Bitcoin involved in the dispute. The outcome of these lawsuits could have far-reaching implications for the crypto industry, especially regarding how companies handle collateral and liquidations.
The Future of Tether and Celsius
As the legal battle between Celsius and Tether intensifies, the stakes are high for both companies. For Celsius, recovering the lost Bitcoin is crucial to settling its debts and emerging from bankruptcy. For Tether, defending its actions is essential to maintaining its reputation as a stablecoin issuer. The court’s decision will likely have a significant impact on the crypto market, influencing how future disputes are resolved. Until then, the crypto world will be watching closely as this high-stakes legal drama continues to unfold.
