On the 9th of August, Celsius Network Limited submitted a lawsuit confronting Tether Limited and some affiliates. Celsius filed the lawsuit via its representative called Blockchain Recovery Investment Consortium, LLC in the US Bankruptcy Court for the Southern District of New York to challenge the validity of an agreement that the firms made in 2022. Tether disclosed this development on its official X account.
Tether Pledges to Enthusiastically Defend Itself against the Exclusive Lawsuit from Celsius
In addition to the announcement on social media, the platform also shared a comprehensive blog post on its official website. The issuer of the top stablecoin USDT has labeled the respective lawsuit as a “shakedown.” It reportedly questions the validity of an agreement made between the companies in 2022. This has ignited a legal fight that Tether has sworn to contest enthusiastically.
In that agreement, Tether offered USDT to Celsius in return for Bitcoin in terms of collateral. However, Bitcoin’s price plunged back in 2022’s June. Hence, Celsius needed to post more collateral to prevent liquidation of the BTC holdings in line with the agreement. Nonetheless, Celsius decided not to offer extra collateral. Contrarily, it ordered Tether to conduct the liquidation of the BTC collateral for the settlement of nearly $815M USDT position.
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In this way, the liquidation took place under the direction of Celsius with its complete consent. Even then, the firm is now pursuing to reclaim BTC of approximately $2.4M worth from Tether. As per Tether, the respective demand does not have any foundation. It asserted that the demand also fails to recognize the agreement’s terms. Moreover, its said that Celsius is endeavoring to unfairly put the consequences of the mismanagement thereof on Tether with this lawsuit.
The Stablecoin Issuer Labels the Lawsuit as Baseless, Saying it Misinterprets the Agreement
Tether has rejected the lawsuit by labelling it as baseless. It mentioned that Celsius’ complaint misinterprets the agreement and misuses the law. The platform additionally questions the jurisdictional validity of the lawsuit and offers several defences confronting the claims. Apart from that, the top stablecoin issuer has expressed its belief in its ability to defend itself against the complaint of Celsius.