Celsius Network Secures $299.5 Million Settlement From Tether, Amounting To Only 7% Of $4.3 Billion Claim

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 was once managing around $25 billion in assets with 1.7 million users, and its collapse represented one of the largest crypto bankruptcies, alongside others like FTX and Voyager Digital. 

The company 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. Celsius’s bankruptcy revealed operational failings, including lack of proper controls and transparency, and the CEO was later charged with fraud.

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.

Read also: Bitcoin, Ethereum Drop After Heavy ETF Outflows Ahead Of Powell Speech

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