"Celsius Scores Major Win in $4.3B Lawsuit Against Tether Over "Flash Sale" of 39,000 BTC"
- What’s the Celsius vs. Tether Lawsuit Really About?
- Why Did Tether Pull the Trigger on the BTC Sale?
- Legal Wins and Losses: Who’s Ahead Now?
- What’s Next for the Crypto Industry?
- FAQs: Celsius vs. Tether Lawsuit
In a high-stakes legal showdown, bankrupt crypto lender Celsius Network just scored a partial victory against Tether (USDT issuer) in a $4.3 billion lawsuit over the controversial 2022 liquidation of 39,500 bitcoin (BTC). A New York bankruptcy judge ruled that Celsius can proceed with claims that Tether violated loan terms by dumping BTC collateral in a "fire sale" during market turmoil. The case hinges on whether Tether skipped a 10-hour grace period before selling—a move Celsius claims cost investors billions. Buckle up as we break down this crypto courtroom drama, complete with juicy details, legal twists, and what it means for the industry. ---
What’s the Celsius vs. Tether Lawsuit Really About?
Picture this: June 2022. Bitcoin’s price is tanking, Celsius is imploding, and Tether—the company behind the world’s largest stablecoin—decides to liquidate a whopping 39,500 BTC (then worth ~$815M) that secured a loan to Celsius. Fast forward to 2025: Judge Martin Glenn just greenlit Celsius’ argument that this was no ordinary margin call. The crypto lender alleges Tether broke their agreement by selling the BTC within hours instead of waiting the contractual 10-hour window. "This wasn’t just bad timing—it was a breach of good faith," claims Celsius’ legal team, arguing the rushed sale depressed BTC prices further. Court documents reveal the BTC was sold at an average of $20,656—well below that month’s market rates.
Why Did Tether Pull the Trigger on the BTC Sale?
Tether’s defense? They claim Celsius’ then-CEO Alex Mashinsky gave verbal approval to liquidate—an argument Judge Glenn called "insufficient" without written proof. Paolo Ardoino, Tether’s CEO, fired back: "This is Celsius trying to blame others for their own collapse." He insists the sale was necessary to recoup $815M in USDT loans and accuses Celsius of "reckless mismanagement." But here’s the kicker: the loan was overcollateralized by 130%, meaning Tether held more BTC than needed. Celsius argues this made the snap sale even more suspicious—like foreclosing on a house when the homeowner’s already paid extra.
---Legal Wins and Losses: Who’s Ahead Now?
Judge Glenn’s ruling is a mixed bag. On one hand, he agreed Tether likely violated the 10-hour rule and dismissed their "verbal approval" defense. On the other, he tossed claims against some Tether entities due to jurisdictional issues and ruled Celsius failed to prove violations under British Virgin Islands law. "The court’s saying Tether played too fast and loose with the rules, but Celsius’ global legal Hail Mary won’t fly," notes a BTCC market analyst. Notably, allegations of fraudulent transfers under U.S. bankruptcy law survived—keeping the $4B damages claim alive.
---What’s Next for the Crypto Industry?
This case sets a precedent for how collateral liquidations should handle during crypto crises. "If lenders can yank the rug mid-meltdown, it amplifies market chaos," argues a TradingView commentator. Meanwhile, CoinGlass data shows BTC open interest spiked post-ruling—traders are clearly betting on volatility. One thing’s certain: with Celsius’ bankruptcy plan underway and Tether vowing to appeal, this battle’s far from over. As for the 39,500 BTC? They’d be worth ~$2.3B at today’s prices—a painful "what if" for Celsius creditors.
---FAQs: Celsius vs. Tether Lawsuit
What’s the main issue in Celsius’ lawsuit against Tether?
Celsius alleges Tether illegally sold 39,500 BTC collateral in June 2022 without waiting the agreed 10-hour margin call period, causing billions in losses.
Did Tether have permission to sell the Bitcoin?
Tether claims Celsius’ ex-CEO verbally approved the sale, but the judge ruled this insufficient without written documentation.
How much money is at stake?
Celsius seeks $4.3 billion—the current value of the 39,500 BTC plus alleged damages from the sale’s market impact.
