- Federal court allows Celsius $4B lawsuit vs Tether over disputed Bitcoin transactions.
- Court rejects Tether’s jurisdiction challenge; breach of contract claims proceed.
- Tether boosts Bitcoin holdings, denies plans for IPO amid ongoing legal battle.
A federal court has allowed Celsius Network to continue its $4 billion lawsuit against the stablecoin issuer Tether, a major development in one of the crypto industry’s most high-stakes legal battles.
The judge rejected Tether’s attempts to dismiss key parts of the lawsuit, which means Celsius can now pursue allegations that Tether improperly liquidated and seized over 57,000 of its Bitcoins during the market chaos of 2022.
What Is at the Heart of the Lawsuit?
The core of the dispute is Tether’s sale of 39,542 Bitcoin in June 2022, which Celsius claims was a breach of their contractual agreement. Celsius alleges this sale violated a 10-hour waiting period and was executed at prices well below market value, causing losses that now exceed $100 million.
Beyond that, Celsius claims that another 15,600 Bitcoin, posted as extra collateral, were never returned. In total, Celsius argues that Tether’s actions unfairly improved its own position as a creditor while leaving thousands of other Celsius creditors behind.
Why Did the Court Reject Tether’s Arguments?
Tether had tried to have the case dismissed by arguing that U.S. courts do not have jurisdiction over the company, as it is incorporated in the British Virgin Islands and Hong Kong. However, the judge denied this motion, stating that because the transactions involved U.S.-based personnel and financial systems, the lawsuit can continue under U.S. bankruptcy laws.
Related: Celsius Creditors Recover 60% After $127M Bitcoin, USD Second Payout
The court’s decision allows Celsius to move forward on several key claims, including breach of contract and fraudulent transfers.
What Are the Broader Implications?
This lawsuit comes at a time when Tether’s own Bitcoin holdings continue to grow. The company recently acquired a majority stake in the investment firm Twenty One Capital, a move that involved transferring nearly 37,230 Bitcoin worth around $3.9 billion.
Related: Celsius: Bankrupt Lender Transfers $6 Million in ETH, Raising Questions
While Tether’s CEO, Paolo Ardoino, has dismissed any plans for an IPO, the company’s massive and growing Bitcoin reserve makes this legal battle over its past actions even more significant for the broader crypto market.
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