Tether Denies Celsius Lawsuit Claims, Calls It a “Shakedown”

Tether has responded strongly to a recent lawsuit from Celsius Network, dismissing it as an attempt to deflect responsibility for its own financial issues.

The lawsuit, filed on Friday, accuses Tether of mishandling the liquidation of Bitcoin (BTC) used as collateral for a loan provided to Celsius.

In a blog post, Tether explained that in 2022, Celsius borrowed USDT from them, pledging Bitcoin as collateral. When BTC’s value dropped, Celsius failed to add more collateral, leading Tether to liquidate the Bitcoin as per their agreement.

Celsius, through its Blockchain Recovery Investment Consortium, is now seeking about $2.4 billion in restitution from Tether.

Tether labeled the lawsuit as a “shakedown” and stated their intention to fight the claims vigorously. CEO Paolo Ardoino defended the company’s actions, stating that the lawsuit misunderstands risk management and liquidation practices.

He reassured that Tether’s strong financial position, with nearly $12 billion in equity, ensures that USDT holders remain secure, even if the lawsuit advances.

Celsius Network, which emerged from bankruptcy earlier this year, has been restructuring and distributing assets to creditors, including shares in a Bitcoin mining company called Ionic Digital, which has accumulated significant BTC holdings.

Author

Alexander Stefanov

Reporter at CoinsPress

Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.