A U.S. bankruptcy judge has ruled that Celsius Network’s lawsuit against Tether can proceed, dismissing part of Tether's arguments for dismissal.
Background of Celsius Network’s Lawsuit Against Tether
Celsius Network accuses Tether of unlawfully liquidating over 39,500 bitcoins in June 2022 during a market crash. These bitcoins were collateral for loans taken by Celsius from Tether, and the lender claims a rushed 'fire sale' occurred, violating a contractual 10-hour waiting period before selling the collateral.
Arguments from Both Sides
Tether described the lawsuit as 'baseless,' asserting that Celsius failed to post additional collateral as BTC prices fell. Celsius contends that Tether liquidated the BTC at a price close to the outstanding debt without giving Celsius a chance to provide more collateral, leading to losses exceeding $4 billion.
Court’s Decision and Ramifications
The judge dismissed some of Tether's objections regarding jurisdiction, determining that U.S.-based activities were involved. Celsius's core claims, including breach of contract and fraudulent transfer, will proceed in court.
The court's decision allows Celsius Network to advance its legal battle against Tether, potentially impacting both entities and the broader cryptocurrency sector.
