TLDR
- U.S. bankruptcy judge allows Celsius’s $4 billion lawsuit against Tether to proceed after rejecting key parts of Tether’s dismissal motion
- Celsius alleges Tether improperly liquidated 39,500 Bitcoin in June 2022 during market crash, selling at $20,656 per coin below market value
- Court ruled Celsius made plausible case for U.S. jurisdiction despite Tether’s incorporation in British Virgin Islands and Hong Kong
- Celsius claims Tether violated 10-hour waiting period requirement and transferred proceeds to affiliated Bitfinex accounts
- Tether CEO Paolo Ardoino recently dismissed IPO speculation, saying company has no plans to go public despite potential $515 billion valuation
A U.S. bankruptcy judge has ruled that Celsius Network can move forward with its multibillion-dollar lawsuit against Tether. The decision denies key parts of Tether’s motion to dismiss the case.
Tether loses bid to dismiss Celsius suit seeking to reclaim what is now over $4B of BTC that Tether took from Celsius as it fell into bankruptcy
Being offshore doesn’t allow you to evade US courts – especially when virtually all Tether’s assets are sitting in the US#Tether pic.twitter.com/rdshox2n0c
— Novacula Occami (@OccamiCrypto) July 1, 2025
The lawsuit centers on Tether’s liquidation of over 39,500 Bitcoin during Celsius’s collapse in June 2022. Court documents filed in New York on Monday detail the allegations against the stablecoin issuer.
Celsius claims Tether executed what it calls a “fire sale” of Bitcoin collateral worth over $4 billion at current prices. The crypto lender alleges this liquidation violated their lending agreement terms.
According to the complaint, Tether issued a margin call as Bitcoin prices dropped during the market crash. Celsius argues that Tether sold the collateral before honoring a required 10-hour waiting period.
The Bitcoin was liquidated at an average price of $20,656 per coin. Celsius claims this was below market value at the time of the forced sale.
Jurisdiction Battle Over International Operations
Tether attempted to dismiss the lawsuit by challenging U.S. court jurisdiction. The company argued its incorporation in the British Virgin Islands and Hong Kong should exempt it from U.S. bankruptcy law.
The judge rejected this argument after finding sufficient domestic ties to the case. Court documents show the transactions involved U.S.-based communications, personnel, and financial accounts.
Celsius made a plausible case that the transfers were domestic in nature. The judge wrote that the alleged misconduct had sufficient connections to warrant U.S. jurisdiction.
While the court dismissed some claims, it allowed key allegations to proceed. These include breach of contract, fraudulent transfer, and preference claims under the U.S. Bankruptcy Code.
The complaint asserts that Tether’s actions violated good faith dealing under British Virgin Islands law. Celsius also claims the proceeds were later transferred to Tether’s affiliated Bitfinex accounts.
Financial Impact and Company Restructuring
Celsius values its losses from the Bitcoin liquidation at over $4 billion based on current Bitcoin prices. The company applied the $812 million in proceeds against Celsius’s outstanding debt.
The crypto lender officially exited bankruptcy on January 31, 2024. This came after an 18-month restructuring process following its collapse.
Celsius was once among the largest cryptocurrency lenders before its downfall. The company is now focused on repaying creditors through its bankruptcy exit plan.
Meanwhile, Tether continues expanding its Bitcoin holdings and operations. The company recently became majority owner of Twenty One Capital, now the world’s third-largest corporate Bitcoin holder.
Tether transferred nearly 37,230 Bitcoin worth approximately $3.9 billion to addresses tied to the platform. This move demonstrates the company’s continued investment in Bitcoin markets.
In June, Tether CEO Paolo Ardoino dismissed speculation about a potential initial public offering. He stated the company has no plans to go public and sees no need for third-party capital.
Ardoino acknowledged that a $515 billion valuation would be attractive but suggested it might undervalue Tether. He pointed to the company’s growing reserves in Bitcoin and gold as justification for higher valuations.
