Celsius will sue Tether for USD 4,000 million

A bankruptcy judge from the Southern District of New York has authorized Celsius, the bankruptcy cryptocurrency lender, to continue with his demand for 4,000 million dollars against Tether.

Demand accuses Tether of Improly liquidate 39,500 Bitcoin (BTC) units, currently valued at about 4,000 million dollarsthat Celsius maintained as a guarantee of a loan in 2022.

According to the demand, the bankruptcy process happened when the Tokens agreement between Celsius and Tether was still in force. The plaintiffs claim that Celsius continued to send funds as a collateral in June 2022, ten hours after the closure of the window indicated by the contract, motivating the falls of the price of Bitcoin, which would have had to avoid the settlement of the debt.

Also according to the plaintiffs, the bankruptcy process motivated Tether to take a liquidation of the collateral, to isolate themselves “of the effect of the bankruptcy of Celsius”.

Now, the main bankruptcy judge, Martin Glenn, who supervises the case, wrote that the alleged verbal authorization of the then executive director of Celsius, Alexander Mashinsky, to liquidate his guarantee was “insufficient.”

The judge added that breach of the 10 -hour period, stipulated in the agreement between companies, It could constitute a contractual breach.

Tether had previously described the demand as “unfounded” and an “extortion.” This is because the liquidation was carried out after Celsius chose not to deposit the funds in Bitcoin demanded within the collateral.

Meanwhile, the order issued this week dismissed a position without prejudice, in favor of Tether. The position in question claims that Tether breached his duty of “good faith and fair treatment” According to the legislation of the British Virgin Islands, where the Stabecoin issuer is based.

The dismissal of Judge Glenn occurred without prejudice, which means that Celsius’s lawyers can modify and re -file the claim if they provide sufficient support.

Celsius, who at some point managed more than 25,000 million dollars in assets, collapsed in 2022, seriously affecting thousands of investors.

The legal consequences led to a sentence of 12 years in prison for fraud for their former executive director, Alex Mashinsky, who lost every right over the company’s assets.

Despite the challenges, Celsius has already paid 2.5 billion dollars to most creditors, as Cryptonoticia reported in September last year. However, Some 121,000 creditors have not yet claimed their funds.

Such movement occurred after the company achieved key agreements to get out of bankruptcy in July 2024 after the judicial approval of its reorganization plan.