Tether Slams Celsius Network’s Lawsuit as a Desperate "Shakedown" Attempt

Tether, the company behind the popular stablecoin USDT, has responded assertively to a lawsuit filed against it by Celsius Network, dismissing the legal action as a desperate attempt to deflect blame for Celsius’s own financial mismanagement.

In a recent blog post, Tether revealed details of a 2022 agreement with Celsius, in which the troubled crypto lender borrowed USDT from Tether using Bitcoin (BTC) as collateral. The arrangement took a dramatic turn when Bitcoin’s price plummeted, and Celsius allegedly failed to meet the agreed-upon terms by refusing to provide additional collateral. As a result, Tether liquidated the BTC collateral in accordance with the contract, a move that has now become the crux of Celsius's complaint.

Celsius, now operating under its Blockchain Recovery Investment Consortium, is seeking approximately $2.4 billion in Bitcoin restitution from Tether, claiming that the liquidation was improperly executed. However, Tether has staunchly denied these allegations, labeling the lawsuit as groundless and pledging a robust defense.

"TTether will never fall prey to shameless litigation money grabs. We will vigorously defend ourselves against the unwarranted allegations made against us, and we expect to prevail in this litigation" the company declared. 

Paolo Ardoino, Tether’s CEO, took to X (formerly Twitter) to further clarify the situation, arguing that Tether's actions were fully in line with the contractual agreement. He also highlighted a fundamental misunderstanding of risk management and market operations by Celsius in its lawsuit. Ardoino reassured USDT holders, emphasizing that Tether’s strong financial health, bolstered by nearly $12 billion in equity, ensures that the stablecoin remains secure, even in the unlikely event that the lawsuit progresses.

"When it comes to the safety of USDT users, without doubt our main priority and duty, Tether group has equity of nearly $12 billion. Even in the most remote scenario in which this baseless lawsuit will get somewhere, USDT token holders will not be impacted" Ardoino stated. 

This dispute marks the latest chapter in the ongoing saga between two significant players in the crypto industry, with Tether positioning itself firmly against what it perceives as a misguided and opportunistic legal challenge.