Was Tether’s Bitcoin Dump the Final Nail in Celsius’s Coffin? Court Says Lawsuit Can Move Forward

Celsius Cleared To Sue Tether Over $4 Billion Bitcoin Liquidation Dispute

A U.S. bankruptcy judge has ruled that Celsius Network can proceed with its lawsuit against Tether, in a legal battle that revisits one of crypto’s most turbulent chapters — the 2022 collapse of Celsius and the alleged “fire sale” of over 39,500 Bitcoin.

Celsius Accuses Tether Of Premature Bitcoin Dump

According to Celsius, the conflict centres on a margin call issued by Tether in June 2022, as crypto markets were reeling.

Tether, which had lent funds to Celsius, allegedly dumped 39,545 BTC at an average price of $20,656 — a figure Celsius says was below market value and executed without proper notice.

The lender claims the move violated a contractual 10-hour waiting period and amounted to both fraudulent and preferential transfers under U.S. bankruptcy law.

Court filings argue this rapid liquidation caused Celsius to lose over $4 billion at current valuations.

The BTC was later moved to accounts connected to Bitfinex, Tether’s sister company.

Tether’s Offshore Argument Rejected By U.S. Court

Tether had sought to dismiss the case, arguing that a U.S. court lacked jurisdiction because it is incorporated in the British Virgin Islands and Hong Kong.

The court disagreed, finding that Tether’s dealings with Celsius involved U.S.-based personnel, communications, and financial accounts.

The judge ruled that Celsius had made a “plausible” case that the disputed actions were domestic in nature, allowing key claims to proceed.

This includes breach of contract, fraudulent transfer, and preferential transfer.

Several minor claims were dismissed.

Bitcoin Collateral At The Heart Of A Legal Power Shift

The legal confrontation has implications beyond Celsius and Tether.

At the heart of the case is how crypto collateral is handled when markets crash — and who bears responsibility when large players offload assets that impact broader valuations.

Celsius, once a major name in crypto lending, exited bankruptcy in January 2024 following an 18-month restructuring.

The company is now focused on repaying creditors, but this lawsuit could shape how future crypto loan agreements are interpreted and enforced in U.S. courts — even when firms operate offshore.

Tether Grows Its Influence While Dodging IPO Speculation

Despite the legal heat, Tether has continued expanding its Bitcoin footprint.

It recently acquired a majority stake in Twenty One Capital, linked to Strike CEO Jack Mallers.

The move gives Tether ties to the third-largest corporate holder of Bitcoin globally.

Tether also shifted nearly 37,230 BTC — roughly $3.9 billion — to addresses associated with the platform.

While some speculate this could be part of a broader positioning strategy, Tether CEO Paolo Ardoino has dismissed rumours of an IPO, calling talk of a $500 billion valuation “a beautiful number” but insisting the company has “no plans” to go public.

Is Legal Accountability Finally Catching Up To Crypto Giants?

This lawsuit could set a critical precedent for how courts treat offshore crypto firms that transact through U.S. infrastructure.

If Celsius’s claims stand, it may signal that even global stablecoin giants like Tether aren’t beyond the reach of domestic law — especially when billions in digital assets are at stake.