Judge Glenn Allows Celsius’ Breach-of-Contract Claims Against Tether to Advance

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In a key ruling, US Bankruptcy Judge Martin Glenn has permitted Celsius to pursue its $4.3 billion lawsuit against Tether, finding that the stablecoin issuer may have violated contractual terms by liquidating Celsius’ Bitcoin collateral prematurely.

The dispute stems from a 2022 loan agreement in which Celsius pledged 39,542 BTC (~$4.3B today) as collateral.

According to court filings, Tether allegedly sold the assets before a mandatory 10-hour grace period lapsed. Judge Glenn dismissed Tether’s defense that Alex Mashinsky verbally approved the liquidation, stating oral consent was legally inadequate.

Tether has maintained its actions were justified, arguing Celsius’ lawsuit is a “blame-shifting tactic” following its bankruptcy. The case could set a precedent for crypto collateral agreements and liquidation protocols.