Tether paid a settlement fee of $300 million to end its case with Celsius.
Stablecoin issuer Tether made a settlement of $299.5 million to end its nearly 15-month-long case with Celsius Network’s bankruptcy. The CEO of Tether, Paul Ardoino, mentioned on his X handle that the duo had reached the settlement phase related to Celsius’s bankruptcy.
In August 2024, Celsius filed a complaint against Tether with the U.S. Bankruptcy Court for the Southern District of New York, accusing the stablecoin issuer of liquidating its Bitcoin collateral even before the 10-hour window to deposit additional collateral ended.
In 2022, during the crypto market turmoil, Celsius went bankrupt, and it borrowed funds from Tether, using Bitcoin (BTC) as collateral.
However, when Bitcoin’s price dropped sharply, Tether liquidated Celsius’s collateral (sold the pledged BTC) to protect its loan. Celsius later sued, arguing that Tether’s liquidation was premature and violated their contract.
According to their loan agreement with Tether, Celsius was allowed a 10-hour window to add more collateral (to prevent liquidation). However, Tether did not honor that clause — instead, it liquidated Celsius’s Bitcoin immediately, without waiting 10 hours. Because of this early liquidation, Celsius lost its “residual interest” in the collateral.
The stablecoin issuer denied breaching any agreement and stated that Celsius Network’s lawsuit seeking to recover approximately 39,542 Bitcoin, nearly $4.5 billion, was “a baseless shakedown.”
