Celsius Network has received a $299.5 million settlement from Tether, the largest stablecoin issuer.
According to a release published today, Celsius Network has concluded its lawsuit against Tether, which was filed in the United States Bankruptcy Court for the Southern District of New York. Tether will only pay 7% of the total $4.3 billion, which Celsius had demanded initially.
Tether pays Celsius Network after three years of court battle
The Blockchain Recovery Investment Consortium (BRIC), a joint venture between GXD Labs and VanEck, began handling the Celsius Network bankruptcy case in early 2024.
In August 2024, BRIC filed the case on behalf of Celsius, claiming that Tether liquidated 39,542 Bitcoins before the expiry of the 10-hour waiting time during the market crash of 2022. After 11 months, Judge Martin Glenn allowed Celsius to proceed with its demands, leading to today’s final ruling.
Tether tried to dismiss the case. The stablecoin issuer claimed that the Bitcoin liquidation followed the process, but Judge Martin Glenn disagreed and dismissed Tether’s claims. He said there were strong reasons for the court to hear the case, particularly because the people, systems, and accounts involved in the transactions were based in the United States.
David Proman, Managing Partner of GXD Labs, said, “We are pleased to have resolved Celsius’s adversary proceeding and related claims against Tether.” He added that BRIC is pleased with the speed of the settlement process.
Celsius initially demanded $4.3 billion from Tether. However, the US Bankruptcy Court for the Southern District of New York ruled that Tether pays 7% of this amount, equivalent to $299.5 million.
Paolo Ardoino, founder of Tether, said on X that “Tether is pleased to have reached a settlement of all issues related to the Celsius bankruptcy.”
Celsius Network was a crypto lending and borrowing platform. In June 2022, Celsius stopped withdrawals due to liquidity issues and later blamed its exposure to FTX.
A month later, on July 13, 2022, Celsius filed for Chapter 11 bankruptcy. Celsius lost around $550 million, but other reports estimate $4.7 billion in investor losses and $7 billion in total market value wiped out.
The founder of Celsius Network, Alex Mashinsky, was sentenced to 12 years in prison in May. Celsius lost around $550 million, but other reports estimate $4.7 billion in investor losses and $7 billion in total market value wiped out. Alex Mashinsky pleaded guilty to commodities fraud and manipulation of Celsius’s native token, CEL.
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