Breaking: Celsius vs. Tether Lawsuit Greenlit by U.S. Judge - The Crypto Clash Heats Up!

U.S. Bankruptcy Judge Throws Down the Gauntlet: Celsius Can Take on Tether

Holy smokes, folks! A U.S. bankruptcy judge just threw a curveball at Tether, giving the green light for Celsius Network's lawsuit to proceed. Tether's key arguments to dodge the case? Shot down!

In a move that's shaking up the crypto world, a judge in the Southern District of New York has made a landmark ruling. Celsius Network's beef with Tether (USDT) is moving forward, with the judge granting some parts and denying others of Tether's motion to dismiss. This bombshell decision was dropped in the Celsius bankruptcy case on June 30.

Celsius Accuses Tether of a Dirty Deal: The 39,500 BTC Liquidation Scandal

Get this: Celsius Network is going after Tether, claiming they pulled a fast one by liquidating over 39,500 Bitcoin (BTC) back in June 2022, right when the crypto market was in free fall. Celsius used these BTC as collateral for loans from Tether, but they're saying Tether went rogue with a rushed "fire sale," selling at a measly average of $20,656 per BTC - way below what it should've been. And to top it off, Celsius alleges Tether skipped a crucial 10-hour waiting period before selling off the collateral.

Celsius is furious, claiming this botched liquidation cost them a staggering $4 billion at today's Bitcoin prices. They're hitting Tether with charges of breach of contract, bad faith, and even fraudulent and preferential transfers that they say should be voided under U.S. bankruptcy law.

Tether Fires Back: Celsius's Claims Are "Baseless," They Say

But hold up! Tether isn't taking this lying down. In a fiery blog post, they called Celsius's lawsuit "baseless." Here's what they had to say:

"Under the agreement, Celsius posted bitcoin (BTC) to Tether as collateral. As the price of BTC started tanking in June 2022, Celsius was supposed to cough up more collateral to keep their BTC safe. But when they didn't, they told us to liquidate the BTC collateral to close out their roughly 815 million USD₮ position with us."

Celsius isn't buying it, though. They're sticking to their guns, saying Tether sold the BTC at a price that almost covered the outstanding debt - without giving Celsius the chance to pony up more collateral, which they claim was required by their agreement.

Tether's Dismissal Bid Crushed: Judge Finds Celsius's Case Plausible

Last August, Tether tried to wiggle out of the lawsuit, arguing that their operations in the British Virgin Islands and Hong Kong made it out of U.S. jurisdiction. They called Celsius's claims an overreach of U.S. law.

But the judge wasn't having it. They found that Celsius had a solid case, with allegations of misconduct involving U.S.-based communications, personnel, and financial accounts. That's enough to make the claims domestic, baby! While some counts got the boot, Celsius's main claims - breach of contract and fraudulent transfer - are steaming ahead to court.