- Celsius Network has reached a $299.5 million settlement with Tether after nearly three years of litigation.
- The dispute involved the alleged premature liquidation of 39,542 bitcoins by Tether in 2022, which Celsius claimed contributed to its bankruptcy.
- Celsius originally sought $4.3 billion in damages, but the final settlement represents about 7% of that initial claim.
- Celsius filed for Chapter 11 bankruptcy in July 2022, facing a $1.19 billion deficit and significant regulatory scrutiny.
- The settlement is part of a broader restructuring that returns assets to Celsius customers and launches a new Bitcoin mining venture.
Celsius Network has obtained a $299.5 million settlement with Tether, resolving a lawsuit that centered on the alleged early liquidation of 39,542 bitcoins in 2022. The settlement concludes a lengthy dispute that Celsius claimed played a critical role in their financial collapse and bankruptcy filing.
Celsius initially sought $4.3 billion in damages, alleging that Tether liquidated its bitcoin holdings before the end of a required 10-hour waiting period. The agreed settlement, worth about 7% of the amount initially demanded, was reached through the Blockchain Recovery Investment Consortium.
Before its decline, Celsius managed around $25 billion in assets and served some 1.7 million users. According to court filings, when it filed for Chapter 11 bankruptcy in July 2022, Celsius reported a $1.19 billion deficit, holding $4.3 billion in assets against $5.5 billion in liabilities. Its bankruptcy process revealed operational issues, like insufficient controls and a lack of transparency. The company’s CEO was ultimately charged with fraud.
Celsius’s restructuring plan, approved in November 2023, includes returning cryptocurrency to customers and the creation of a new Bitcoin mining business called Ionic Digital. This mining firm is owned by Celsius creditors and managed by mining company Hut 8. Ionic Digital is expected to become publicly traded, according to recent reports.
The recent settlement with Tether marks a significant recovery step for Celsius’s creditors and contributes to the company’s broader efforts to resolve outstanding claims and compensate stakeholders. The settlement comes as the broader cryptocurrency market saw a 2.1% decline over the past day, with Bitcoin dropping 1.6%.
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