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Tether Slams Celsius Network’s ‘Baseless’ $2 Billion Lawsuit

Tether Slams Celsius Network's 'Baseless' $2 Billion Lawsuit

Stablecoin issuer Tether has slammed the”baseless” claims that it illegally liquidated Celsius Network’s bitcoin collateral. Tether accused the crypto lender of trying to “improperly impose the costs of Celsius’ mismanagement and failure on Tether.”

 

Shameless Litigation

Stablecoin issuer Tether Holdings Ltd. has rejected the “baseless” claims by the bankrupt crypto lender Celsius Network that the USDT issuer illegally liquidated its bitcoin held as collateral. The stablecoin issuer asserts that Celsius Network’s lawsuit, filed with the United States Bankruptcy Court, is an attempt to “improperly impose the costs of Celsius’ mismanagement and failure on Tether.”

In a statement released on Aug. 10, Tether vowed not to fall prey to “shameless litigation” and expressed confidence that the court will rule in its favor. The remarks by the issuer of the biggest stablecoin by market capitalization follow revelations that Celsius Network wants the court to compel Tether to return $2 billion in bitcoin (BTC) lost due to alleged fraudulent transfers.

The funds were lost after Tether reportedly sold 39,542.42 BTC belonging to Celsius Network in a so-called fire sale. As per the token agreement, Celsius was required to post BTC as collateral to cover loans obtained from the stablecoin issuer.

The agreement also reportedly stipulated that Celsius should post extra collateral within 10 hours if the value of the BTC fell below a certain threshold. The crypto lender asserts that the application of collateral was a fraudulent transfer not permitted under the bankruptcy code.

 

Obvious Misapplication of the Law

Responding to the allegations, the stablecoin issuer insisted that Celsius chose not to post additional collateral to close out its roughly $815 million USDT position with Tether.

“Over two years following its arm-length agreement with Tether—and armed with the benefit of hindsight—this lawsuit incredibly now seeks the return of approximately US$2.4 billion worth of BTC from Tether, despite the BTC being liquidated at Celsius’ direction and with Celsius’ consent at June 2022 prices,” Tether said in the statement.

The stablecoin issuer claimed that Celsius’ complaint is not only an “obvious misapplication” of the law but also raises substantial jurisdictional questions.

Meanwhile, in a message seemingly aimed at holders of the USDT stablecoin, Tether said that in the remote event of Celsius prevailing in court, the stablecoin issuer’s financial position is such that token holders will not be impacted.

 

Source: bitcoin news

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