TLDR
- Celsius secured a $299.5 million settlement, a fraction of its $4.3 billion claim.
- The legal battle focused on the premature liquidation of 39,542 Bitcoins by Tether.
- Tether denied wrongdoing but agreed to settle the case in Celsius’s bankruptcy proceedings.
- Celsius’s bankruptcy restructuring moves forward after resolving the Tether dispute.
Celsius Network has secured a $299.5 million settlement from Tether, marking the end of a lengthy legal battle over the alleged improper liquidation of Bitcoin collateral. The settlement concludes a significant chapter in Celsius’s bankruptcy proceedings, but falls short of the $4.3 billion originally sought in damages. The agreement comes after months of court disputes and legal challenges between the two companies.
Legal Dispute Overview
In 2022, Celsius Network filed for bankruptcy, citing a $1.2 billion shortfall on its balance sheet. One of the key legal issues involved allegations that Tether, the issuer of a popular stablecoin, prematurely liquidated 39,542 bitcoins.
Celsius claimed that Tether violated a required 10-hour waiting period before executing these liquidations. The lawsuit, filed in August 2024, sought damages of $4.3 billion, arguing that these premature actions had a direct impact on the company’s financial troubles.
Tether denied all allegations, calling the lawsuit “baseless” and arguing that Celsius’s financial issues were a result of its own mismanagement. The legal proceedings were contentious, with both parties putting forward contrasting claims about the events surrounding the liquidation. Despite the challenges, Tether and Celsius reached an agreement, bringing the case to a close.
Settlement Agreement
The settlement amount, which totals $299.5 million, represents only a fraction of the damages Celsius originally sought. At about 7% of the $4.3 billion claim, the agreement offers a financial resolution to one of the final disputes in Celsius’s ongoing bankruptcy restructuring.
According to Tether’s CEO, Paolo Ardoino, the company is “pleased to have reached a settlement of all issues related to the Celsius bankruptcy.” The agreement ensures that the legal dispute between Celsius and Tether will not extend further.
This settlement also signals a key milestone in the broader bankruptcy proceedings for Celsius, which has been under restructuring since its bankruptcy filing in July 2022. The company has since been managed by the Blockchain Recovery Investment Consortium (BRIC), which aims to recover assets for creditors impacted by the firm’s financial collapse.
Celsius Bankruptcy Restructuring
Celsius’s bankruptcy case has been a drawn-out process, with the company facing challenges in managing its debts and obligations. After filing for bankruptcy in 2022, Celsius entered a restructuring phase that involved efforts to recover assets, resolve legal issues, and pay creditors.
The firm emerged from bankruptcy protection in November 2023, although it continued to face litigation linked to its operations and financial practices. The bankruptcy proceedings have also been complicated by the conviction of former CEO Alex Mashinsky.
Mashinsky, who played a key role in the firm’s operations, was sentenced to 12 years in prison in May 2025 after pleading guilty to commodities fraud and manipulation of the company’s token, CEL. The legal consequences have added complexity to Celsius’s recovery efforts and its dealings with creditors, including Tether.
Legal and Financial Impact of the Settlement
The settlement with Tether allows Celsius to close one of its most significant legal disputes. While the amount secured is far less than the original claim, it provides a resolution that will likely help expedite the ongoing bankruptcy process. The agreement also indicates that Celsius may continue to seek recovery of additional funds through other legal channels, potentially involving other parties linked to the firm’s collapse.
Tether’s resolution of the case also helps mitigate the risk of further reputational damage. The company had faced increasing scrutiny amid the legal battle, and the settlement may serve to reduce the legal pressures it was facing in connection with the Celsius bankruptcy.
Despite the outcome, the case remains a stark reminder of the challenges and risks associated with the cryptocurrency industry, especially as firms like Celsius deal with complex legal and financial situations. As Celsius’s bankruptcy case progresses, the focus will now shift to recovering additional assets for creditors and completing the restructuring process.
