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Tether settlement: Tether has agreed to pay $299.5 million to resolve claims from the Celsius bankruptcy estate alleging improper Bitcoin liquidations. The settlement resolves an adversary proceeding filed in August 2024 in the U.S. Bankruptcy Court for the Southern District of New York and closes related litigation.
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Tether paid $299.5 million to settle Celsius claims
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Tether said it acted under a 2022 margin agreement; Celsius argued liquidations occurred without a full 10‑hour remedy window
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Claims sought recovery of roughly 39,542 BTC (about $4.5 billion at the time) and related damages; the settlement is a fraction of that recovery target
Tether settlement: Tether paid $299.5M to settle Celsius claims over alleged improper Bitcoin liquidations. Read timeline, key facts and creditor impact.
What is the Tether settlement?
Tether settlement refers to a payment of $299.5 million by USDT issuer Tether to resolve adversary claims brought by the Celsius Network bankruptcy estate. The payment settles litigation alleging Tether improperly liquidated Bitcoin collateral tied to Celsius’s July 2022 bankruptcy, concluding the adversary proceeding filed in August 2024.
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How did the dispute over Bitcoin liquidations arise?
The dispute centers on whether Tether lawfully liquidated Bitcoin that served as collateral for a margin obligation. Celsius’s suit sought recovery of roughly 39,542 BTC—about $4.5 billion at the valuation cited in the complaint—and alleged Tether did not provide a contractually required 10‑hour window to post additional collateral before liquidations. Tether maintained it acted under a 2022 margin agreement and said liquidations were directed to cover an $815 million debt. A federal judge allowed the lawsuit to proceed in July (civil docket, U.S. Bankruptcy Court for the Southern District of New York).
Settlement details and parties involved
The settlement was announced as part of a resolution of the adversary proceeding filed in the U.S. Bankruptcy Court for the Southern District of New York in August 2024. The Blockchain Recovery Investment Consortium (BRIC), a consortium formed by investment firms GXD Labs and VanEck, represented the Celsius estate as litigation administrator and asset recovery manager. BRIC’s role was to maximize recoveries for creditors while overseeing illiquid and litigation assets during Celsius’s wind‑down phase.
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Tether CEO Paolo Ardoino publicly confirmed the settlement on social media, stating the company had settled “all issues” related to the Celsius bankruptcy claims. GXD Labs Managing Partner David Proman provided a statement noting satisfaction with the timeliness and resolution of the claims. These quotes are reported as public statements from the principal parties.
Why the settlement matters
The settlement ends a high‑profile dispute over creditor recoveries and counterpart conduct during a major bankruptcy. For creditors and market participants, the payment reduces litigation uncertainty and limits further legal costs tied to the adversary proceeding. For Tether, resolving the claims avoids protracted litigation exposure and potential additional financial and reputational costs.
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What this means for creditors and the industry
Creditors benefit from a concrete recovery amount in the bankruptcy estate’s wind‑down. The settlement also serves as a case study in margin mechanics and custodial practices during market stress, highlighting the importance of clear contractual notice windows and dispute resolution protocols. The broader crypto industry may view the outcome as precedent for how custodial liquidations and bankruptcy recoveries can be negotiated and resolved.
Frequently Asked Questions
How much did Tether pay to settle the Celsius bankruptcy claims?
Tether paid $299.5 million to resolve the Celsius adversary proceeding. The suit originally sought recovery of approximately 39,542 BTC (valued at about $4.5 billion in the filing), so the settlement represents a partial recovery relative to the claims filed by the bankruptcy estate.
Did Tether admit wrongdoing in the settlement?
No public statement accompanying the settlement indicates an admission of wrongdoing. Tether asserted it had acted lawfully under a 2022 margin agreement and emphasized the resolution was a settlement of claims. Public statements from Tether’s CEO described the matter as resolved, while Celsius’s estate, represented by BRIC, accepted the settlement terms on behalf of creditors.
Key Takeaways
- Payment amount: Tether paid $299.5 million to resolve the Celsius adversary proceeding.
- Disputed assets: Celsius sought recovery of about 39,542 BTC and alleged improper liquidation without the required 10‑hour remedial window.
- Practical impact: Settlement reduces litigation risk for both parties, provides funds for creditor distribution, and underscores contractual margin and notification practices in crypto lending.
Conclusion
COINOTAG reporting: The Tether settlement concludes a major lawsuit stemming from Celsius Network’s bankruptcy by delivering a $299.5 million payment that resolves claims over Bitcoin liquidations. The resolution, confirmed by statements from BRIC representatives and Tether leadership, provides immediate funds for the Celsius estate and removes a significant legal overhang. Stakeholders should monitor creditor distributions and any related disclosures from the U.S. Bankruptcy Court for the Southern District of New York for final accounting and implementation details.
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Published: October 15, 2025. Updated: October 15, 2025. Author/Organization: COINOTAG.
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Source: https://en.coinotag.com/tether-299-5-million-payment-may-resolve-alleged-improper-bitcoin-liquidations-linked-to-celsius/
