A bankruptcy court in New York has allowed Celsius to continue with its nearly $4 billion lawsuit against Tether. This lawsuit stems from accusations that Tether improperly liquidated nearly 40,000 bitcoins in June 2022, right before Celsius paused withdrawals due to its own financial troubles.

Key Points:

• The court ruling enables Celsius to proceed with its claims, asserting that Tether’s actions resulted from a failure to provide adequate time for posting collateral.
• Celsius asserts that if given the opportunity, it could have avoided the forced liquidation of its bitcoins, which occurred at a market low.
• Tether, on the other hand, labeled the lawsuit a “shakedown” and firmly stated that it intends to defend itself vigorously.

In a recent order by Chief Bankruptcy Judge Martin Glenn, he acknowledged that Celsius had the contractual right to post collateral and that the alleged verbal consent from Mashinsky for Tether to liquidate the collateral was inadequate. The judge highlighted that not allowing the necessary time could still constitute a breach of contract.

Further Action:

Tether’s counterclaims faced some dismissal, but Celsius retains the option to amend its complaint. The ongoing litigation will examine these competing interests closely as it develops.