Tether, the issuer of USDT, has faced a setback in its ongoing lawsuit against Celsius Network. A US bankruptcy judge has denied Tether’s request to dismiss the lawsuit, permitting claims against it to proceed. Celsius asserts that Tether liquidated Bitcoin collateral worth billions improperly during its financial downfall in 2022.

According to court documents filed on June 30, Tether allegedly executed a rapid sale of more than 39,500 BTC, which was then applied to the $812 million debt owed by Celsius without adhering to the agreed-upon procedures.

Tether loses bid to dismiss Celsius suit seeking to reclaim what is now over $4B of BTC that Tether took from Celsius as it fell into bankruptcy. Being offshore doesn’t allow you to evade US courts – especially when virtually all Tether’s assets are sitting in the US. — Novacula Occami (@OccamiCrypto) July 1, 2025

Celsius Bitcoin Lawsuit Against Tether – Claims That Tether’s Liquidation Cost The Firm Over $4B In Bitcoin At Current Prices

Celsius believes that Tether acted against the principles of good faith and fair dealing by breaching their lending agreement. The lawsuit contends that Tether’s sale was executed before a pre-arranged waiting period, and that it liquidated assets significantly below market rates.

Tether’s CEO, Paolo Ardoino, recently dismissed rumors of an impending IPO for Tether, asserting that the company values were speculated too high.

Paving the way for a potential legal battle, the judge found Celsius’s claims plausible during a procedural hearing, indicating they may have substantial links to US law, despite Tether’s offshore registration.