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Promote with Leviathan NewsCelsius Network’s bankruptcy estate has filed an adversary lawsuit against stablecoin issuer Tether in U.S. Bankruptcy Court (Southern District of New York), alleging that Tether improperly liquidated nearly 39,000–39,500 BTC posted as collateral during Celsius’s 2022 collapse, and seeking roughly $2.4–4+ billion in restitution based on Bitcoin’s value. Celsius claims Tether violated their lending agreement by ignoring a contractual 10‑hour waiting period before liquidation, selling the BTC at an average price around $20,600—below contemporaneous market prices—and then transferring the proceeds to Bitfinex accounts to offset Celsius’s debt of over $800 million. The complaint frames these actions as breach of contract plus fraudulent and preferential transfers under U.S. bankruptcy law, aiming to claw back value for creditors of the failed lender. Tether has publicly rejected the allegations, calling the suit a “baseless shakedown” and vowing to “vigorously defend” itself, arguing that it acted within its contractual rights after Celsius failed to meet margin calls during a sharp Bitcoin drawdown. Tether’s position is that the BTC liquidation was conducted at Celsius’s direction to cover an $800M+ exposure and that Celsius—not Tether—mismanaged risk leading up to its bankruptcy. A U.S. bankruptcy judge has allowed the core claims (including breach of contract and fraudulent transfer theories) to proceed, rejecting most of Tether’s attempts to dismiss for lack of jurisdiction or failure to state a claim, which underscores that offshore crypto firms can still face substantial litigation risk in U.S. courts when their activities are sufficiently tied to U.S. systems and accounts. The case matters for several reasons. It is one of the largest crypto–bankruptcy clawback efforts to date and focuses directly on how collateral is handled in extreme market stress, testing both on‑chain and off‑chain margin and liquidation practices between major crypto institutions. The outcome could influence how lending agreements, margin‑call mechanics, and liquidation protocols are drafted and enforced across the industry, especially where large stablecoin issuers like Tether are involved. It also adds to the broader regulatory and legal scrutiny already surrounding Tether’s operations and reserves, and signals that U.S. courts are willing to assert jurisdiction over complex cross‑border crypto disputes when domestic infrastructure, personnel, or accounts are implicated.
AI-generated background, compiled from web sources — not editorial content.
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