Celsius

Bitcoin

when

Two years after its <a href="https://thecoinrise.com/celsius-bankruptcy-reveals-some-indirect-connections-of-ftxs-ceo-with-one-of-its-creditors/">dramatic collapse into bankruptcy</a>, the once-prominent crypto lender Celsius is attempting to recoup losses by taking legal action against Tether, the leading stablecoin issuer. However, Tether CEO Paolo Ardoino calls the lawsuit “baseless.” 
<h2 id="span-style-font-weight-400-celsius-targets-tether-span">Celsius Targets Tether&nbsp;</h2> 
In a lawsuit filed on August 9 in the U.S. Bankruptcy Court for the Southern District of New York, <a href="https://thecoinrise.com/celsius-network-files-lawsuit-against-tether-to-recover-billions/">Celsius alleges that Tether</a> wrongfully liquidated over $800 million worth of Bitcoin (BTC) during the 2022 bear market. 
Under a 2020’s loan agreement, <a href="https://thecoinrise.com/tether-reportedly-loans-1-b-to-crypto-lending-platform-celsius/">Celsius borrowed big amounts of Tether’s stablecoins</a>, USDT and EURT, at favorable interest rates by posting Bitcoin as collateral. However, as the crypto market experienced severe downturns in mid-2022, Bitcoin’s value plummeted, putting its collateral at risk of being liquidated. 
<h3 id="span-style-font-weight-400-allegations-span">Allegations</h3> 
According to the lawsuit, Tether demanded additional collateral from Celsius on June 13, 2022, as Bitcoin’s price continued to fall. Celsius claims it complied with this request by transferring more than 16,700 BTC to Tether. It argues that these transfers unfairly prioritized Tether’s position as a creditor over others. 
The core of complaint is that Tether allegedly breached the terms of their contract by prematurely liquidating the collateral. The lawsuit asserts that the agreement entitled Celsius to a ten-hour window to deposit additional collateral. However, Tether moved forward with liquidating over 39,500 BTC—effectively wiping out Celsius’s residual interest in the collateral. 
<h2 id="span-style-font-weight-400-tether-responds-span">Tether Responds</h2> 
Tether was quick to counter Celsius’s allegations, <a href="https://tether.io/news/tether-will-defend-itself-against-shake-down-litigation-commenced-by-celsius/">calling</a> the lawsuit a “baseless shakedown.” The company’s CEO, Paolo Ardoino, issued a strong response, defending Tether’s actions and the integrity of its contractual obligations. 
Ardoino explained that Tether’s loan agreements require borrowers to provide overcollateralization in Bitcoin. When the value of the collateral falls below a specified margin, the borrower must either provide additional collateral or risk liquidation. 
Ardoino stated that Celsius had explicitly instructed Tether to sell the Bitcoin held as collateral when the price dropped in mid-2022. Tether then liquidated the BTC to cover its exposure, returning any excess funds to Celsius. Ardoino <a href="https://x.com/paoloardoino/status/1822272182027690341?s=46">stated</a>: 
<blockquote>
 “Now, more than two years later, this baseless lawsuit is trying to claim that we should give back the Bitcoin that was sold to cover Celsius’s position.”
</blockquote> 
Tether’s response also took aim at the broader implications of the lawsuit, describing it as a “baseless shakedown” designed to benefit lawyers, bankers, and consultants rather than the parties directly involved. 
The post <a href="https://thecoinrise.com/tether-ceo-paolo-ardoino-responds-to-celsius-lawsuit/">Tether CEO Paolo Ardoino Responds to Celsius’ Lawsuit</a> appeared first on <a href="https://thecoinrise.com">TheCoinrise.com</a>.

Tether CEO Paolo Ardoino Responds to Celsius’ Lawsuit

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