Tether Disputes Celsius' 'Shakedown' Litigation, Vows to Defend Itself 'Till the End'

Tether, the issuer of the world's largest stablecoin, USDT, said it plans to defend itself against what it calls “shakedown” litigation brought by the bankrupt crypto lender Celsius.

Cryptocurrency issuer Tether has announced its intention to defend itself against a lawsuit filed by bankrupt crypto lender Celsius, which is demanding the return of 57,428.64 Bitcoin (around $3.3 billion) or its equivalent value.

Celsius filed the lawsuit in the U.S. Bankruptcy Court of the Southern District of New York, alleging that Tether made “preferential and fraudulent transfers” of Bitcoin during the market downturn in mid-2022. The lawsuit claims that Tether demanded and received additional collateral from Celsius to secure its position, which Celsius argues was done to shield Tether from the impending bankruptcy.

However, Tether disputes these claims, stating that the Bitcoin was liquidated at Celsius’ direction and with its consent at June 2022 prices. Tether CEO Paolo Ardoino responded to the lawsuit on Friday, asserting that the legal action is baseless and that Tether's actions were in full compliance with their contract. He added that Tether will fight the lawsuit “till the end” to set an example against what he describes as “shameless money grabs.”

Celsius also seeks $100 million in damages for alleged breaches of contract, claiming that Tether applied Celsius’ Bitcoin collateral at a lower-than-market value, which they argue should be recovered for the benefit of Celsius’ estate.

Meanwhile, Tether claims that its financial position remains strong, with consolidated equity of nearly $12 billion as of June 30, assuring that Tether token holders will not be impacted by the lawsuit.

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