An American bankruptcy judge has authorized Celsius Network A trial of $ 4 billion against Tether to proceed, rejecting parties of Tether’s request to reject. The case, deposited in the New York South Districtfocuses on the alleged liquidation of Tether of 39,542 Bitcoin (BTC) in June 2022, during the collapse of Celsius.
Celsius claims the attachment violated their loan agreement by making a “fire sale” BTC Collateral at $ 20,656 – Market value of understanding – without adhering it to a 10 -hour waiting period, which cost Celsius more than $ 4 billion at current prices. The trial alleges a breach of contract, a fraudulent transfer and a preferential transfer under the American bankruptcy law.
Tether argued that the American Court lacked competence, citing its incorporation into the British Virgin Islands and Hong Kong, but the judge judged that the staff, communications and financial accounts based in the United States of Tether established sufficient interior links. While certain affirmations, such as “good faith and fair functioning” under the law of the British Virgin Islands, have been rejected, the basic allegations advance to the discovery.
This decision could have an impact on how loans for cryptography and guarantee management are regulated, in particular for offshore companies with American operations. Celsius, who left bankruptcy in January 2024 after having reimbursed 93% of Creditors 2.5 billion dollars, seeks to recover the value of the BTC and $ 100 million in damages. TETHER, now a major Bitcoin support, denies reprehensible acts, qualifying the “Shakedown” trial.
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The trial highlights the risks and legal ambiguities in cryptographic loan agreements, in particular with regard to collateral liquidation. A decision in favor of Celsius could lead to more strict regulations on how cryptographic companies manage the guarantees, which potentially requires clearer contractual conditions and standardized liquidation processes to protect borrowers. This can establish a precedent on how bankruptcy courts treat cryptographic assets, influencing future cases involving cryptographic companies in distress.
The judge’s decision to allow the case to continue, despite Tether’s offshore status, reports that US courts can assert jurisdiction over foreign crypto companies with major American operations or contacts. This could dissuade offshore entities from engaging with American customers without robust legal compliance, which has an impact on their commercial models. It highlights the growing scope of the American bankruptcy law in cryptographic litigation, potentially obliging businesses like Tether to adjust their operational structures to mitigate legal risks in several jurisdictions.
TETHER, transmitter of USDT Stablecoin is the cornerstone of the cryptography market. An prolonged legal battle or an unfavorable decision could undermine the confidence in USDT, potentially causing market volatility, especially if Tether’s reserves or financial practices are examined more. The case could also affect investors in crypto loan platforms, as the collapse of Celsius and subsequent disputes highlight the risks of unmarked loans and volatile collateral management.
The emphasis focused on the alleged “fire sale” of Tether Celsius bitcoin Guarantees at a price lower than the market could lead to new standards for how cryptographic companies liquidate assets during distress. The courts may require greater transparency and membership of the agreed conditions, which has an impact on the way in which the loan agreements are structured on the industry level. For Celsius, the recovery of $ 4 billion (the current value of disputed bitcoin) could considerably benefit its creditors, who received 93% of their funds in the bankruptcy regulations. However, a loss could weaken its recovery after bankruptcy.
For Tether, a responsibility of $ 4 billion would be substantial, even with its market capitalization of $ 90 billion for the USDT. He could also invite other legal challenges to other parties, taking into account the history of Tether of the regulatory examination. Celsius argues that Tether violated their loan agreement by liquidating 39,542 BTC without following the 10 -hour waiting period, selling at a low price ($ 20,656 per BTC) during a market drop in June 2022. Celsius said that this caused a loss of $ 4 billion (at current BTC prices) and laws on the failed failed prioritization of prioritization of interests.
Tether maintains that he acted in his rights to protect his interests as a lender, given the imminent collapse of Celsius. Tether calls the trial a “shakedown” and maintains that liquidation was necessary to mitigate its own risks, rejecting allegations of inappropriate driving or undervaluation. Celsius takes advantage of the American bankruptcy law to affirm that the American operations of TETH (staff, communications and financial accounts) are the subject of American jurisdictions, despite its incorporation of the British virgin islands.
Tether maintains that he operates outside the American jurisdiction and that the terms of the agreement, governed by British virgin islands Law should limit the scope of the case. Tether’s push to reject the case reflects a broader desire among offshore cryptography companies to avoid American regulatory surveillance. The dispute highlights a wider ideological fracture in the crypto: Celsius, a centralized loan platform, and Tether, a centralized stabbing transmitter, both operate with significant control over user assets, merging with decentralized crypto ethics. The trial exposes how centralized entities can exercise power over the results of the guarantees and the market, fueling debates on the need for decentralized alternatives.
Celsius seeks to maximize the recovery of creditors by recovering the value of liquidated bitcoin, supervising the actions of Tether as predator and harmful for its users. Tether prioritizes his financial stability as a lender, arguing that his actions were necessary to protect his reservations and maintain the PEG of the USDT, which is essential to the wider cryptography ecosystem. This trial occurs in the midst of an increased regulatory concentration on cryptographic companies, with a meticulous examination of its reserve transparency and Celsius competing with the benefits of its bankruptcy in 2022.
The case could amplify calls for clearer regulations on stablescoins and cryptographic loans, while testing the limits of cross -border legal responsibility in the industry. The result can influence the way in which cryptographic companies structure loan agreements and manage guarantees, which could reshape the risk landscape for investors and platforms.
