Celsius has filed a lawsuit against Tether, accusing it of mishandling collateral during its 2022 collapse. The judge allowed the case to proceed despite Tether's attempts to dismiss the lawsuit.
Circumstances of the Lawsuit
At the heart of the case is a June 2022 margin call, during which Tether allegedly sold over 39,000 BTC below market value before the end of an agreed waiting period. These funds were reportedly routed to pay down Celsius’s $812 million debt, which Celsius claims violated their loan agreement.
Court Ruling
The court dismissed several minor charges but upheld the main allegations: breach of contract, fraudulent transfer, and preferential treatment ahead of Celsius’s bankruptcy. If proven, these could allow Celsius to reclaim part of its stated $4 billion loss at current prices.
Next Steps for Celsius and Tether
Celsius emerged from bankruptcy earlier this year and is actively repaying creditors. Meanwhile, Tether continues to expand its influence, most recently with large Bitcoin transfers tied to its growing crypto holdings.
The ongoing dispute between Celsius and Tether will continue in court, potentially leading to significant consequences for both companies and further developments in the cryptocurrency market.
