In 2022, Tether Limited issued USDT to Celsius Network Limited, which later filed for bankruptcy in July of that year. Under their agreement, Celsius provided Bitcoin (BTC) as collateral. However, with Bitcoin’s value plummeting in June 2022, Celsius faced a margin call. The agreement required Celsius to provide additional collateral to prevent the liquidation of its BTC held by Tether. Celsius, according to Tether, opted not to do so and instead instructed Tether to liquidate the BTC to cover its $815 million USDT position.
Tether’s Response
Tether has strongly criticized the lawsuit filed by Celsius on August 9 in the U.S. Bankruptcy Court for the Southern District of New York. Tether labeled the lawsuit as “baseless” and a “meritless shakedown,” arguing that it misrepresents the facts and the original agreement. Tether claims that Celsius is attempting to shift the blame for its financial troubles onto Tether, retroactively imposing costs for decisions made during a period of financial instability.
The company stated:
“Rather than acknowledge the clear validity of the agreement established before Celsius’ bankruptcy, this lawsuit seeks to wrongfully shift the burden of Celsius’ mismanagement onto Tether.”
Tether is determined to defend itself vigorously in court and is confident in a favorable outcome. They emphasized their stance against what they perceive as unjust litigation tactics:
“Tether will not succumb to opportunistic legal actions.”
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