Highlights
- Tether CEO Paolo Ardoino just broke silence on its latest lawsuit
- Celsius Network has reportedly sued some of its users before now
- He noted that the stablecoin firm will set precedence with this current lawsuit
Stablecoin issuer Tether has refused to take the fall for Celsius’ Bitcoin (BTC) fraud claim. Paolo Ardoino, the firm’s CEO offered a concise explanation into the situation that transpired between both parties.
Tether Calls Fraud Claims Baseless
Recently, Celsius Network filed a lawsuit against the USDT issuer and its affiliated entities on the basis that they contributed to its bankruptcy. In the lawsuit, the complaint noted that the stablecoin company conducted “fraudulent” and “preferential” transfers of Bitcoin running to the tune of over $2 billion based on today’s market value.
Hence, the bankrupt lender is seeking to reclaim the collapsed estate’s lost BTC due to the stablecoin issuer’s actions during a critical period leading up to the firm’s bankruptcy.
However, Ardoino went back memory lane to give a picture of what actually transpired. He noted that the firm offered USDT to some of its customers and the plaintiff featured on the list. The arrangement it had with these selected customers basically involved providing them with United States Dollar-pegged stablecoin USDT while they provide an overcollateralization in Bitcoin.
“If the price of bitcoin (the collateral) falls below the margin call price, then the borrower needs to send more collateral. If more collateral is not sent, Tether has the right to liquidate the customer’s position,” Ardoino explained further.
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The firm’s decision to accept overcollateralization in assets like Bitcoin comes off as its strategy to enforce unparalleled risk management. When Bitcoin faced a major price downturn in 2022, the bankrupt firm reached out to the USDT issuer requesting that the latter sells off its BTC held as collateral.
The stablecoin company heeded the request, sold the Bitcoin and returned the excess to the lender. As a result, Ardoino stated that fraud claim is baseless as the Bitcoin in question went into covering the exchange’s position at the time.
Readiness to Pursue a Legal Redress
Beyond pointing out some other flaws in the lawsuit filing, Ardoino and the team confirmed willingness to seek redress in court. The firm considers the lawsuit a “shake down” litigation but noted it will fight to set a precedence for the broader market.
Celsius Network has reportedly filed series of lawsuit against even its own users. The goal is to recoup as much funds as it can to repay its creditors. The resistance from the USDT issuer comes off as its way of collectively speaking for other users the firm has tried to file lawsuits against.
Legal brawls are not uncommon in the crypto ecosystem. Just this week, blockchain payments firm Ripple Labs Inc saw an end to its long-drawn SEC lawsuit. Judge Analisa Torres asked the firm to pay a fine of $125 million for the aspects of the Federal securities law it violated when it sold XRP to institutional investors.
While the case has ended for now, prominent lawyers Jeremy Hogan and Marc Fagel have cleared the air on possible appeal from both Ripple and the SEC.
CoinGape