Celsius Wins Court Approval to Sue Tether Over $812 Million BTC Liquidation

A bankruptcy court in the United States has agreed to continue with the legal proceedings initiated by Celsius Network against Tether, a major stablecoin issuer. This confrontation arises from Celsius’ accusations following its financial turmoil in 2022, where it alleged that Tether prematurely liquidated 39,500 BTC, worth around $812 million, placed as collateral.

During the highly volatile crypto market in 2022, Celsius Network faced substantial financial strain. They accused Tether of selling off the Bitcoin that was used as collateral, allegedly breaking both their contract and principles of fair dealing. This liquidation supposedly happened at an average Bitcoin price of $20,656. According to Celsius, the liquidation was executed nine hours prior to the end of the 10-hour margin call grace period, breaching their contract and causing Celsius significant financial damage. The liquidated assets were reportedly funneled into Tether’s Bitfinex accounts.

Tether labeled the allegations groundless, arguing that Celsius failed to maintain adequate collateral. They challenged the U.S. court’s authority over this internationally involved case, seeking dismissal. Tether, having moved its headquarters to El Salvador in early 2025, aimed to reinforce its argument against the jurisdiction of U.S. courts. However, the court maintained its authority due to Tether’s assets within the U.S.

With the case moving forward, Celsius’ accusations against Tether will be rigorously assessed. The focus will be on the integrity of the contract, relevant legislation, and collateral processes. The outcome could notably affect contractual dynamics and collateral policies among key crypto firms. The swift changes in the crypto landscape and high-stakes trades between major entities continue to highlight the need for clear regulatory and legal frameworks regarding secured lending and liquidation practices, which market participants are keenly observing.

Precedents from similar disputes reveal challenges in interpreting contract terms and jurisdictional claims within the global legal arena. The impact of a company’s relocation on legal proceedings remains part of this complex puzzle. The court’s judgment could influence the financial responsibilities of both entities significantly. This ruling has the potential to guide policy-making for other players in the industry. It could serve as a precedent in future legal disputes between major crypto companies.

The U.S. court’s decision to advance the lawsuit between Celsius and Tether reopens crucial legal discussions within the global cryptocurrency sector. The proceeding aims to scrutinize Bitcoin collateral terms, the timeline for margin calls, and the conditions of liquidation. Its conclusions are expected to shed light on how financial transactions are regulated and how agreements among platforms might evolve.

A U.S. bankruptcy judge has granted permission for the bankrupt crypto lender Celsius to proceed with its lawsuit against Tether. The lawsuit, which involves a $4 billion claim, alleges that Tether improperly liquidated 39,500 BTC belonging to Celsius. The court's decision to allow the lawsuit to proceed is significant as it raises the stakes in the global crypto legal landscape. The plaintiffs argue that Tether's actions were carried out through U.S. intermediaries or counterparties, which has implications for the jurisdiction of the case.

The court's ruling opens the door for Celsius's lawsuit to move forward in the U.S., despite Tether operating offshore. This development is crucial as it sets a precedent for how similar cases involving offshore entities and U.S. intermediaries will be handled in the future. The lawsuit is part of a broader legal battle between Celsius and Tether, with Celsius seeking to recover the value of the BTC that was liquidated. The outcome of this case could have far-reaching implications for the crypto industry, as it could set a precedent for how disputes involving offshore entities and U.S. intermediaries are resolved. The case also highlights the complexities of the crypto industry, where entities often operate across borders and jurisdictions, making legal disputes more challenging to resolve.

The court's decision to allow the lawsuit to proceed is a significant victory for Celsius, as it gives them the opportunity to seek redress for the alleged unauthorized liquidation of their BTC. The case also underscores the importance of clear regulations and oversight in the crypto industry, as disputes involving offshore entities and U.S. intermediaries can be complex and challenging to resolve. The outcome of this case will be closely watched by industry participants and regulators alike, as it could set a precedent for how similar disputes are handled in the future.