Celsius Sues Tether for $800 Million: CEO Ardoino Calls Lawsuit a 'Baseless Shakedown'

Two years after filing for bankruptcy, Celsius is attempting to recover funds by suing Tether for an alleged improper liquidation of over $800 million worth of Bitcoin (BTC) during the bear market of mid-2022.

Celsius Takes Action Against Tether

The lawsuit was filed on August 9 in the US Bankruptcy Court for the Southern District of New York. Celsius claims that Tether breached their contract from a 2020 loan agreement that allowed Celsius to borrow USDT and EURT while posting Bitcoin as collateral.

As BTC prices plummeted in mid-2022, Tether requested additional collateral, which Celsius claims led to the liquidation of their posted Bitcoin. The lawsuit alleges that Tether’s actions unfairly enhanced its position as a creditor.

Tether's Response

In a swift reaction, Tether and CEO Paolo Ardoino labeled the lawsuit a “baseless shakedown.” Ardoino explained that Tether had the right to liquidate Celsius’s collateral when its value fell below the margin call price. He stated that Celsius instructed Tether to sell the Bitcoin held as collateral, and all BTC was liquidated appropriately to cover Celsius’s position, with excess funds returned.

Ardoino emphasized that the lawsuit is flawed and that Tether is confident in their contractual obligations. Furthermore, he reassured token holders that regardless of the lawsuit's outcome, their holdings would remain unaffected due to Tether's substantial equity of nearly $12 billion.

Legal Implications

Tether's official statement described the lawsuit as “meritless” and asserted that it would only benefit the lawyers and consultants involved. Ardoino remains optimistic about Tether’s position and the strength of their legal case against Celsius.