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

Key Takeaways

• Celsius claims Tether liquidated 39,500 BTC early, violating a 10-hour grace period in their loan agreement.
• A U.S. bankruptcy judge ruled the court has jurisdiction due to Tether’s use of U.S.-based assets and intermediaries.
• The case could reshape how courts handle cross-border crypto contracts and collateral disputes.

A United States bankruptcy judge has ruled that Celsius Network can proceed with its $4 billion lawsuit against stablecoin issuer Tether.

The case centers on a 2022 dispute, when Celsius collapsed and accused Tether of prematurely liquidating 39,500 BTC, worth over $800 million at the time, that had been pledged as loan collateral.

Court Grants Celsius Green Light in Case Against Tether

Celsius alleges that Tether acted before the required 10-hour grace period had expired, violating the terms of their agreement and inflicting massive financial damage.

Tether, now based in El Salvador, has denied wrongdoing. The company argues that Celsius failed to maintain its collateral requirements, prompting a legitimate margin call and liquidation.

Tether also challenged the court’s jurisdiction, citing its offshore status. But the judge disagreed, ruling that Tether’s use of U.S.-based intermediaries and assets gave the court grounds to hear the case.

Why This Case Matters for Crypto Lending

Beyond the $4 billion at stake, this case is likely to set legal precedent on several key issues in crypto finance:

• When and how collateral can be liquidated.
• How margin call grace periods are interpreted.
• The reach of U.S. courts in crypto contracts involving offshore firms.

The court’s decision also signals a growing willingness to assert U.S. jurisdiction over global crypto entities that tap into domestic financial infrastructure.

For Celsius, the ruling provides a rare lifeline as it continues navigating bankruptcy proceedings and creditor negotiations.

For the broader industry, it’s a reminder that even offshore firms aren’t immune from legal accountability when operating in U.S. markets.