Celsius had initially sought $4.3 billion, alleging that Tether improperly liquidated 39,542 bitcoins before the expiration of a required 10-hour waiting period in 2022.
After nearly three years of litigation, Celsius Network (CEL) has secured a $299.5 million settlement from stablecoin issuer Tether (USDT), resolving a legal dispute over the early liquidation of Bitcoin (BTC) that contributed to Celsius’s 2022 bankruptcy.
The settlement represents roughly 7% of the $4.3 billion in damages Celsius had initially sought, stemming from the alleged premature liquidation of 39,542 bitcoins before a mandated 10-hour waiting period.
Celsius filed for Chapter 11 bankruptcy in July 2022 amid a liquidity crisis triggered by steep declines in cryptocurrency prices and surging user withdrawals. The company had paused withdrawals in June 2022, citing “extreme market conditions,” which drew widespread user protests and regulatory scrutiny.
At the time of filing, Celsius disclosed a $1.19 billion balance sheet deficit. The platform held about $4.3 billion of assets against $5.5 billion of liabilities, as per a Bloomberg report.
Following its bankruptcy exit in January 2024, Celsius wound down operations, shuttering its mobile and web apps by February 2024, and effectively ending its crypto lending business.
The company’s restructuring plan, approved in November 2023, involved returning cryptocurrency to customers, distributing billions in assets, and launching a new Bitcoin mining venture, Ionic Digital. The mining firm, owned by Celsius creditors and managed by Hut 8 (HUT) under a multi-year agreement, is expected to become publicly traded.
The settlement with Tether, finalized through the Blockchain Recovery Investment Consortium, marks a significant recovery for the Celsius estate and its creditors.
The cryptocurrency market slipped on Tuesday, falling 2.1% over the past 24 hours to a total market capitalization of $3.9 trillion. Bitcoin’s price dropped 1.6%, though retail sentiment on Stocktwits remained in ‘bullish’ territory, with chatter levels holding at ‘high’ over the last day.
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