Celsius and Tether battle over loan collateral, highlighting allegations of unfair practices and financial damage.
Author: Chirag Sharma
Written On: Sat, 10 Aug 2024 19:18:03 GMT
Celsius Network, a well-known crypto lender, had a significant loan agreement with Tether Ltd. dating back to 2020. This arrangement allowed Celsius to borrow stablecoins like USDT and Euro Tether (EURT), with Bitcoin used as substantial collateral. At its peak, the loan reached nearly $2 billion in USDT, secured by tens of thousands of BTC.
As the Celsius and Tether dispute escalates, the spotlight is on the ninety-day period before Celsiusā bankruptcy filing on July 13, 2022. During this time, Tether allegedly demanded and secured more collateral from Celsius, totaling 15,658.21 BTC, and further secured new borrowings with an additional 2,228.01 BTC. These actions, now under legal scrutiny, are claimed to have unfairly benefited Tether, to the detriment of other creditors.
The lawsuit suggests that Tetherās liquidation of Celsiusā assets, particularly the Bitcoin collateral, was both hasty and commercially unreasonable. Allegations point to Tetherās actions leading to a āfire saleā of Bitcoin at prices below market value, further complicating the conflict. This move, the lawsuit argues, deprived Celsius of the opportunity to survive the market downturn and added to the lenderās financial woes.
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