- Tether denies Celsius Network’s $2.4 billion fraud claims, asserting that Bitcoin transfers were for risk management purposes.
- Celsius alleges Tether’s fraudulent Bitcoin transactions contributed to its bankruptcy; Tether claims these accusations are baseless.
The lawsuit, filed by Celsius, claims that Tether contributed to its bankruptcy by conducting fraudulent Bitcoin transfers totaling over $2 billion. In response, Tether CEO Paolo Ardoino has denied these allegations, calling them baseless.
Ardoino provided a detailed account of the events leading to the lawsuit. He explained that Tether had offered USDT, a stablecoin pegged to the U.S. dollar, to Celsius Network in exchange for overcollateralization in Bitcoin. This arrangement required Celsius to provide Bitcoin as collateral, which Tether could liquidate if the value of Bitcoin dropped below a certain threshold.
When Bitcoin prices fell significantly in 2022, Celsius requested Tether to liquidate the Bitcoin collateral. Tether complied, selling the Bitcoin and returning any excess funds to Celsius. Ardoino asserts that this transaction was conducted to cover Celsius’s position and therefore does not constitute fraud. According to him, the Bitcoin was used to manage risk and fulfill the terms of their agreement.
Ardoino also criticized the lawsuit as a form of “shake down” litigation and expressed Tether’s intent to fight the claim in court. The stablecoin issuer views the legal action as an attempt by Celsius to recover funds inappropriately and aims to defend itself to set a precedent for future cases.
