A U.S. bankruptcy judge rejected key parts of Tether’s motion to dismiss the case and ruled that Celsius Network’s $4 billion lawsuit against Tether may proceed.
A significant milestone in the ongoing fallout from the crypto lender’s collapse, the decision was filed in a New York court on June 30, 2025.
Claimant Celsius alleges that Tether executed a “fire sale” of the assets to cover Celsius’s $812 million debt without honoring a 10-hour waiting period required by their contract.
Celsius accuses Tether of improperly liquidating over 39,500 Bitcoin in June 2022, worth over $4 billion today, during a market crash, violating the terms of their lending agreement.
It goes on to explain that Tether sold Bitcoin at an average price of just $20,656 and then transferred to accounts controlled by Tether’s affiliate, Bitfinex.
The charges against Tether include breaching its contract, acting in bad faith under British Virgin Islands law, and carrying out fraudulent and preferential transfers claims.
Tether, incorporated in the British Virgin Islands and Hong Kong, argued that the case should be dismissed for lack of U.S. jurisdiction.
However, the judge found that the instruments of alleged misconduct involved domestic operations, communications, and bank accounts, making the application of U.S. law appropriate. While the court dismissed some of the claims, it found the key claims such as breach of contract, fraudulent transfer, and preference were valid claims.
Celsius entered bankruptcy in 2022, officially emerged from it in January 2024 and the company is now in the process of repaying its creditors.
Meanwhile, Tether continues expanding its Bitcoin holdings. It recently acquired a controlling stake in Jack Mallers’ Twenty One Capital, making it the third largest corporate holder of Bitcoin.
