Mark Twain’s Take on the Celsius vs. Tether $4B Crypto Drama 🤑

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  • Celsius’ $4B Bitcoin lawsuit against Tether gets a green light from the judge.
  • Tether accused of liquidating Bitcoin in bad faith, causing a financial headache.
  • Court dismisses Tether’s non-U.S. jurisdiction claim, much to their chagrin.

Well, if you ever thought the world of cryptocurrency was a peaceful and harmonious place, think again, my friend. Celsius Network Limited, a name that once rang with the promise of digital wealth, has been given the go-ahead by a U.S. bankruptcy court to pursue a $4 billion lawsuit against Tether Limited. This lawsuit, filed in the Southern District of New York, claims that Tether, in a fit of what can only be described as financial mischief, wrongfully liquidated Bitcoin collateral in 2022. The court, in its infinite wisdom, denied Tether’s motion to dismiss, finding the claims made by Celsius to be credible enough to proceed. 📜💰

The Blockchain Recovery Investment Consortium, a group that sounds like it was formed to right the wrongs of the crypto world, brought this legal case forward in August 2024, alongside Celsius. The complaint alleges that Tether, in a move that would make a used car salesman blush, sold Bitcoin that was supposed to be held as collateral in a 2022 transaction. Celsius claims that, due to the current price of Bitcoin, they are now over $4 billion in the hole, all thanks to Tether’s liquidation antics. On July 2, 2025, the court ruled in favor of proceeding with the case, effectively telling Tether that their jurisdictional challenges were about as effective as a screen door on a submarine. 🚤🚫

Allegations of Breach and Fraud

Celsius, in their lawsuit, accuses Tether of breaching the contract by liquidating Bitcoin without any reasonable cause. They argue that Tether’s actions involved U.S.-based communications and financial accounts, which, in the eyes of the court, was enough to establish jurisdiction in the U.S. The court found Celsius’s claims of contract breach and potential fraud to be plausible. Specifically, Celsius claims that Tether liquidated assets in bad faith, causing significant financial damage. This decision is a major milestone for Celsius, a company that has been trying to recoup its losses since its fall in 2022. 📈📉

In an August 2024 statement, Tether described the lawsuit as a “baseless shakedown.” However, the court, in its infinite wisdom, held that the evidence provided by Celsius was sufficient to pursue the case. It seems that in the world of crypto, even the most audacious claims can find a sympathetic ear. 🗣️🔍

Implications for the Crypto Industry

The ruling has shed light on the legal issues surrounding cryptocurrency contracts. Regulators like the SEC and FTC have already had their hands full with the bankruptcy of Celsius, which was declared under Chapter 11 in July 2022. This case is just another chapter in the ongoing saga of the crypto industry’s legal battles. 📜⚖️

Source –X

The case has the potential to set a precedent for how collateral is handled in crypto bankruptcies. Since the value of Bitcoin is a key factor in the $4 billion claim, the outcome could have far-reaching implications for future contracts between crypto companies. The court’s decision to deny Tether’s extraterritorial defense also highlights the power of U.S. bankruptcy law in cross-border crypto litigation. 🌍🔍

Celsius based its allegations on a 2022 agreement in which Tether lent it USD 30 million worth of the USDT stablecoin, backed by Bitcoin collateral. When Tether sold the Bitcoin, Celsius was in the midst of a liquidity crisis, and they argue that the sale was both unwarranted and economically devastating. The case aims to recover the value of the liquidated assets, estimated at a cool $4 billion. 💸💥

Next Steps in the Legal Battle

The court’s ruling opens the door for discovery and additional arguments. Both parties will now have the opportunity to present evidence to support their claims. Celsius is determined to show that Tether’s actions were not just wrong but also illegal. The case remains in the U.S. Bankruptcy Court of the Southern District of New York, presided over by Judge Martin Glenn. 🏛️🔍

This is not the only legal activity Celsius is involved in. The SEC and FTC filed complaints against Celsius in 2023, including accusations against the company and its former executives. Those suits are still ongoing, but the Tether case is a separate matter, focusing specifically on the Bitcoin liquidation issue. 📜🔍

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2025-07-05 12:44