TL;DR
- A U.S. bankruptcy judge has allowed Celsius Network to proceed with major claims against Tether related to the disputed liquidation of 57,000 BTC.
- Celsius argues the Bitcoin was sold improperly during its 2022 collapse, violating bankruptcy laws and lending agreements. If successful, Celsius could recover assets now worth over $4 billion.
- This decision marks a key step in one of crypto’s most closely watched legal battles.
Celsius Network has secured a legal victory in its ongoing effort to recover billions in Bitcoin from Tether. On June 30, a U.S. bankruptcy court ruled that Celsius may move forward with multiple claims, including allegations of breach of contract, fraudulent transfers, and preferential treatment. The case centers on more than 57,000 BTC—now worth over $4 billion—that Celsius says was wrongfully liquidated or withheld by Tether in mid-2022.
According to court filings, Tether liquidated 39,542 BTC on June 13, 2022, at an average price of $20,656—well below market rates at the time. Celsius contends the sale violated a contractual 10-hour notice period and resulted in over $100 million in immediate losses. The firm also claims the BTC was later transferred to Bitfinex accounts, an entity affiliated with Tether, without transparency or adherence to the lending terms. Celsius alleges this strategy was designed to maximize Tether’s recovery while minimizing exposure to market volatility and legal risk.
Tether Accused Of Prioritizing Its Own Interests
Celsius argues that Tether prioritized recovering its $812 million loan by securing repayment through questionable asset movements, leaving other creditors at a disadvantage. It outlines three main disputes: 15,658 BTC in collateral shortfall, 2,228 BTC in excessive cross-collateralization, and the 39,542 BTC sold without proper notice. Celsius claims these actions qualify for reversal under U.S. bankruptcy law.
While some claims were dismissed—particularly those tied to foreign entities and British Virgin Islands law—the judge found that Celsius had established sufficient U.S. jurisdiction for its core allegations. This opens the door to further legal discovery and potential asset recovery. Celsius now has the opportunity to strengthen its case through deeper forensic review of internal Tether communications and transactional records.
Crypto Industry Eyes Outcome Of Legal Showdown
Celsius exited bankruptcy in January 2024 and is actively repaying creditors. Meanwhile, Tether is expanding its Bitcoin holdings, recently transferring over 37,000 BTC to its affiliated platform Twenty One Capital, now among the largest corporate holders globally. The outcome of this lawsuit could set critical legal precedent for creditor rights and institutional behavior in digital asset lending.
