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Judge Allows Celsius to Proceed with $4 Billion Lawsuit Against Tether

In a significant legal development, a bankruptcy judge in New York has permitted Celsius Network to advance its $4 billion lawsuit against stablecoin issuer Tether.

Celsius alleges that Tether improperly liquidated around 39,500 bitcoins in June 2022, which were held as collateral for loans, shortly before the company halted withdrawals.

The lawsuit contends that Tether breached their agreement by not allowing Celsius adequate time to meet its collateral demands, effectively selling the bitcoins at depressed market prices.

Celsius's legal team argues that had they been given the agreed-upon window to act, they could have avoided the loss, which is now worth over $4 billion.

In response, Tether characterized the lawsuit as a "baseless" attempt to shift responsibility for Celsius's financial mismanagement.

The bankruptcy judge ruled that Tether's alleged actions, including selling the collateral without adhering to the contractual terms, warrant the continuation of the case.

Despite dismissing some claims, the judge found that key allegations, such as breach of contract and fraudulent transfer, could proceed, highlighting the significance of U.S. jurisdiction in this context.

Such a ruling underscores the potential implications for crypto firms operating offshore, as they must navigate their legal obligations meticulously to avoid extensive litigation in U.S. courts.

The ongoing case will be closely watched, as it may set precedents for future disputes in the rapidly evolving cryptocurrency landscape.

As developments unfold, the outcome could shape the regulatory environment for both borrowers and lenders within the crypto space.