Cryptocurrency exchange platform Celsius has taken legal action against Tether. The lawsuit alleges asset mishandling by Tether, prompting Celsius to demand approximately $3.5 billion in Bitcoin (BTC) returns, in addition to damages and legal fees.
According to details made public, Celsius alleges that during its insolvency proceedings, Tether received a specific amount of its stablecoin (USDT), a form of cryptocurrency anchored to the US dollar, from Celsius. As part of this arrangement, Tether was given collateral of 39,542.42 BTC. As BTC prices fell, the agreement necessitated additional collateral from Celsius to avoid asset liquidation. However, Celsius alleges that Tether liquidated the BTC at a value that almost precisely matched the debt, without affording them the opportunity to offer more collateral.
Tether, in a recent blog post, vehemently rebuked these allegations, pledging to fervently dispute the ‘unwarranted claims’ referring to them as a ‘shakedown’. Asserting that it did not infringe on their contractual agreement, Tether maintains Celsius instructed the selloff having not provided further collateral to cover their approximately 815 million USDT position with Tether.
With the legal wrangles looming, Tether expressed its commitment to contest the lawsuit while reassuring USDT stakeholders. Leveraging its $12 billion consolidated equity, Tether reassured that its token holders would not be affected, even if the implausible lawsuit progressed.
Contrarily, there’s a noteworthy discrepancy regarding the compensation Celsius is seeking through the lawsuit. According to Tether’s blog post and circulating crypto community reports, the asked selloff amount corresponds to 39,542.42 BTC, translating to $2.4 billion at Aug 10 BTC values. Nonetheless, according to page 28 of the litigation documentation, Celsius also wants two other transfers in that period cancelled which, combined with the previously mentioned amount, total 57,428.64 Bitcoin, which equates to approximately $3.48 billion. Additionally, they are seeking at least $100 million in damages and legal fees.