Celsius Network Limited has decided to take on Tether in court, demanding more than $2 billion worth of Bitcoin.
The lawsuit was filed yesterday through the Blockchain Recovery Investment Consortium, LLC, and targets Tether Limited along with several of its affiliates.
The battleground is set in the United States Bankruptcy Court for the Southern District of New York.
The drama between Celsius and Tether traces back to a deal they struck in 2022. At the time, Celsius borrowed USDT from Tether, putting up BTC as collateral. But things took a nosedive in June 2022 when Bitcoin prices dropped like a rock.
According to their agreement, Celsius was supposed to put up more BTC to keep the deal alive. Instead, Celsius told Tether to sell off the BTC collateral to cover an $815 million USDT position.
The claims and Tether’s response
Now, Celsius is coming back with a legal hammer, trying to claw back around $2.4 billion in BTC from Tether, even though they directed the sale of that Bitcoin themselves.
Tether is calling the lawsuit a “shameless money grab,” claiming it’s just an attempt to dump Celsius’ problems onto its shoulders.
According to Tether, this lawsuit completely ignores the reality of the agreement they both signed and is built on a “misapplication of the law.”
The company’s management has made it clear that they’re ready to fight this out in court and are confident they’ll come out on top. In their words:
“As we’ve said many times, Tether will never fall prey to shameless litigation money grabs. We will vigorously defend ourselves against the unwarranted allegations made against us, and we expect to prevail in this litigation.”
Beyond the lawsuit, Tether is flexing its financial muscle. As of June 30th, Tether reported that their group’s consolidated equity stands strong at nearly $12 billion.
They’ve also pointed out that their reserves backing tokens in circulation are rock-solid, amounting to over $118 billion. The liabilities? Just over $113 billion, which means they’ve got a healthy cushion of more than $5 billion.
Paolo Ardoino, Tether’s CEO, claims that the company is not only stable but also highly profitable. The first half of 2024 alone saw Tether raking in a record-breaking $5.2 billion in profit.
With nearly $12 billion in equity, Paolo made it clear that Tether is in a prime position to continue leading the stablecoin market. Paolo added that:
“With Tether Group’s own equity reaching $11.9 billion, Tether has achieved an impressive and unmatched financial strength enabling it to continue leading the stablecoin industry in stability and liquidity.”
Tether’s management also said that their diversified investments in areas like sustainable energy, Bitcoin mining, AI infrastructure, and more, are not even considered part of their reserves backing the issued tokens.
