Defunct cryptocurrency exchange Celsius has filed a lawsuit against Tether, accusing the company of misappropriation of assets and seeking approximately $3.5 billion in Bitcoin returns, damages, and legal fees.
Tether reports that Celsius is seeking the return of about $2.4 billion worth of Bitcoin. However, court documents reveal that Celsius is asking for relief in the form of 57,428.64 BTC, or its current market value, plus damages and legal fees.
The lawsuit stems from a loan agreement during Celsius’ bankruptcy proceedings, where Tether loaned Celsius a specific amount of Tether (USDT), the company’s stablecoin. In exchange, Celsius provided 39,542.42 BTC as collateral. As Bitcoin’s price declined, Celsius was required to provide additional collateral to avoid liquidation, according to the agreement between the two parties.
Celsius alleges that Tether liquidated the Bitcoin at a price that just covered the debt, without giving Celsius the chance to provide the necessary collateral.
In response, Tether has dismissed the lawsuit as baseless, calling it a “shake down” and pledging to “vigorously defend” itself against the allegations. In a blog post, Tether stated that Celsius had actually directed them to liquidate the BTC collateral after choosing not to provide additional collateral: “When Celsius chose not to post additional BTC, it directed Tether to liquidate the BTC collateral Tether held in order to close out its roughly 815 million USD₮ position with Tether.”
Tether also reassured its USDT stakeholders, citing its $12 billion in consolidated equity and stating that even in the unlikely scenario that the lawsuit progresses, Tether token holders would not be impacted.
The exact amount Celsius is seeking appears to be under debate. While Tether’s blog post mentions 39,542.42 BTC, worth around $2.4 billion as of August 10, the legal filing indicates that Celsius is also seeking the return of two other Bitcoin transfers made during the same period, totaling 57,428.64 BTC. At a price of $60,627 per BTC, this amounts to roughly $3.48 billion.
Additionally, Celsius is seeking at least $100 million in damages, plus further damages to be determined at trial, along with legal fees.