Key points
- Celsius accused Tether of wrongdoing in a 2022 deal in which Tether provided USDT to Celsius in exchange for BTC collateral.
- Tether has denied any wrongdoing, saying the lawsuit is baseless and an attempt at “extortion” to recoup losses caused by Celsius’s mismanagement.
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Tether, the issuer of the USDT stablecoin, has responded to Celsius Network in response to a lawsuit filed against the company on Friday. Tether called the case an “extortion” attempt to shift blame for Celsius’s financial mismanagement onto Tether.
According to a recent study Blog entry From Tether, in 2022, the company and Celsius signed an agreement in which Celsius borrowed USDT from Tether, using Bitcoin (BTC) as collateral.
When the price of BTC fell, Celsius refused to provide additional collateral as required by the agreement. Tether then liquidated the BTC collateral under the terms of the agreement when Celsius failed to meet its obligations, the firm explained.
Celsius, through its Blockchain Recovery Investment Consortium, is now accusing Tether of improper liquidation. Celsius is demanding restitution of approximately $2.4 billion in BTC from Tether, but the stablecoin issuer claims the lawsuit is baseless and vows to defend itself.
“Tether will never fall victim to shameless litigation seeking to grab money. We will vigorously defend ourselves against unwarranted accusations made against us and look forward to winning this litigation,” Tether said.
In a mail In X, Tether CEO Paolo Ardoino argued that Tether acted in accordance with the contract and that the lawsuit fails to understand basic concepts of risk management, market slippage, and settlement processes.
He said that even if the lawsuit went ahead, Tether’s strong financial position, with nearly $12 billion in capital, ensured that USDT holders would not be affected.
“When it comes to the security of USDT users, which is undoubtedly our top priority and duty, the Tether group has a capital of almost 12 billion dollars. Even in the most remote scenario where this baseless lawsuit goes anywhere, USDT token holders will not be affected,” Ardoino noted.
Celsius Network, formerly a leading cryptocurrency lender, emerged from bankruptcy earlier this year after completing transactions under its confirmed restructuring. plan, including distributing more than $3 billion in cryptocurrency and cash to creditors.
Celsius’ creditors also received shares in Ionic Digital, a Bitcoin mining company created in February, as part of the bankruptcy exit. Ionic has mined over 1,300 BTC since its creation and currently holds over 1,800 BTC. saying the firm in a recent press release.
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