Catenaa, Monday July 07, 2025- A US bankruptcy court has cleared Celsius to move forward with the majority of its $4.3 billion lawsuit against Tether, the issuer of the world’s largest stablecoin.
The legal dispute stems from allegations that Tether improperly liquidated 39,542 bitcoin in collateral before the required 10-hour waiting period elapsed, violating terms of their lending agreement.
The order, issued by Chief Bankruptcy Judge Martin Glenn, stated that verbal authorization by former Celsius CEO Alex Mashinsky did not supersede the written contractual terms.
Tether’s sale of the bitcoin, now valued at $4.3 billion, was linked to loans backed by crypto assets that Celsius had taken from the company before its 2022 collapse.
Tether has denied the allegations, calling the suit “baseless” and asserting that it followed the agreement in good faith. The company claims it acted responsibly in response to Celsius’ deteriorating financial health, which eventually revealed a $1.2 billion hole in its books.
Judge Glenn dismissed one count in the complaint, a claim under British Virgin Islands law accusing Tether of breaching a duty of good faith.
That count was dismissed without prejudice, leaving Celsius the option to revise and resubmit the argument.
Celsius filed for bankruptcy in 2022 and emerged in late 2023 under a reorganization plan. The court’s ruling permits the broader case to proceed, highlighting continuing fallout from the crypto lending crisis and increasing scrutiny of collateralized asset liquidations.
