- A US judge has allowed Celsius to sue Tether, claiming it wrongfully liquidated 39,500 BTC worth US$812M during Celsius’s 2022 collapse.
- Celsius says Tether breached their deal by dumping BTC too fast, moving funds to Bitfinex, and violating BVI law and US bankruptcy rules.
- Tether called the suit baseless, blamed Celsius for failing collateral, and tried to dismiss the case, arguing US courts lack jurisdiction.
Celsius Network’s multibillion-dollar fight against stablecoin giant Tether is moving ahead after a US bankruptcy judge ruled that the lawsuit can stand trial.
This goes back to 2022 when the crypto lender accused Tether of pulling off an improper fire sale of its Bitcoin collateral in June, just as Celsius unraveled under margin calls and plunging prices. Court filings in New York say Tether dumped more than 39,500 BTC, worth about US$812M (AU$1.2B) then, at an average of US$20,656 (AU$31,510) per coin.
Celsius argues the liquidation ignored the agreed 10-hour window for margin calls, breached their lending contract, and violated basic good faith standards under British Virgin Islands law.
The lender also claims Tether moved the proceeds to its Bitfinex accounts, turning a quick margin move into what Celsius calls a fraudulent and preferential transfer under US bankruptcy rules.
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Background to the Celsius-Tether Case
So, let’s rewind and simplify it a bit:
- Celsius borrowed money from Tether, which loaned a specific amount of USDT during the company’s bankruptcy proceedings. In exchange Celsius provided Tether with the amount of BTC in question.
- However, when the price of Bitcoin went south that year, Celsius was required to provide more BTC as collateral to avoid getting liquidated.
- Celsius claims Tether liquidated the BTC before the bankrupt lender could post the collateral it had pledged. This premature liquidation—nine hours before the margin-call deadline—ended up costing Celsius billions.
In response, Tether basically said the lawsuit was baseless and went on a bid to dismiss the lawsuit back in August 2024. The company stated that Celsius failed to post the additional collateral, triggering the sell-off.
When Celsius chose not to post additional BTC it directed Tether to liquidate the BTC collateral Tether held in order to close out its roughly 815 million USD₮ position with Tether.
TetherRather than recognize the clear validity of the agreement entered into years before Celsius’ bankruptcy, this lawsuit seeks to improperly impose the costs of Celsius’ mismanagement and failure on Tether”
But that’s not all. Tether actually tried to have the entire case thrown out arguing the transactions happened overseas and that US courts have no say. Funny enough, the stablecoin firm moved its HQ to El Salvador in January 2025.
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