Celsius Network Sues Tether to Recover $3.3B Worth of Bitcoin (BTC) Transferred as Collateral

Defunct crypto lending platform Celsius Network is taking legal action to recover billions of dollars worth of Bitcoin (BTC) that it previously transferred to USDT issuer Tether.

Crypto lending platform Celsius Network, now bankrupt, has filed a lawsuit to recover billions of dollars in Bitcoin (BTC) that it had earlier transferred to stablecoin issuer Tether.

Celsius, in a new complaint filed in the Southern District of New York, alleges that it had transferred 39,542.42 BTC, currently valued at $2.31 billion, to Tether as collateral for the stablecoins that it had borrowed from the issuer. However, Celsius claims that Tether used the asset to pay off its outstanding loan and for an amount less than the fair market value of the crypto asset at the time when Celsius became insolvent.

Celsius is also seeking to recover 15,658.21 BTC ($915.96 million) and an additional 2,228.01 BTC ($130.33 million) that were transferred to Tether as collateral within a 90-day period prior to filing for bankruptcy. Celsius’ lawyers claim that these are preferential transfers under the Bankruptcy Code.

“These preferential and fraudulent transfers of Bitcoin should be avoided and recovered from Tether, and Tether should be ordered to pay damages for its unlawful application of collateral.”

Tether, in response, has called the complaint a “meritless shakedown” that will only benefit the lawyers, bankers and consultants involved in the suit.

“The complaint is undermined by the actual facts underlying the agreement between Celsius and Tether, relies on an obvious misapplication of the law, ignores the numerous defenses that Tether has to the claims asserted against it and raises substantial jurisdictional questions.”

The stablecoin issuer has stated that it will be filing a response in court.

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