Finance

Tether’s $299.5M Celsius Settlement: Did Bitcoin’s Price Manipulation Claims Finally Fade?

Tether settled Celsius’s suit for $299.5M, far less than the $4.5B sought, ending the bankruptcy case.

October 14, 2025, 4:53 PM

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Executive Summary

Tether paid $299.5 million to settle claims from the Celsius Network bankruptcy estate, a figure significantly lower than the nearly $4.5 billion in Bitcoin Celsius initially sought.

The dispute stemmed from Celsius’s allegations that Tether improperly liquidated Bitcoin collateral, while Tether maintained its actions were lawful under a 2022 agreement after Celsius failed to meet margin requirements.

The Blockchain Recovery Investment Consortium (BRIC) facilitated the settlement as Celsius’s asset recovery manager, in a related development to former Celsius CEO Alex Mashinsky’s 12-year prison sentence for fraud.

The Story So Far

The recent settlement between Tether and the Celsius Network bankruptcy estate arises from Celsius’s July 2022 bankruptcy, which followed alleged financial mismanagement and led to its former CEO’s conviction for fraud. The dispute centered on Celsius’s claim that Tether improperly liquidated Bitcoin collateral prior to the bankruptcy without contractual notice, while Tether maintained its actions were lawful under a 2022 agreement after Celsius failed to meet margin requirements. This resolution is part of the ongoing efforts by the Blockchain Recovery Investment Consortium (BRIC) to maximize asset recovery for Celsius creditors.

Why This Matters

Tether’s $299.5 million settlement with the Celsius Network bankruptcy estate, significantly less than the $4.5 billion initially sought, resolves a major legal dispute over Bitcoin collateral liquidation. This outcome provides a substantial, albeit reduced, recovery for Celsius creditors as part of the ongoing wind-down process, while potentially bolstering Tether’s legal standing and market confidence by concluding a contentious claim. The resolution also offers insight into how complex crypto bankruptcy cases are being managed and settled, setting precedents for future asset recovery strategies in the digital asset space.

Who Thinks What?

Celsius Network alleged that Tether improperly liquidated Bitcoin collateral prior to Celsius’s bankruptcy, claiming Tether failed to provide a contractually required 10-hour window before liquidation, thereby destroying Celsius’s residual interest.

Tether maintained its actions were lawful under a 2022 agreement, asserting it liquidated Bitcoin at Celsius’s direction to cover an $815 million debt after Celsius failed to meet margin requirements, and dismissed Celsius’s lawsuit as a “baseless shakedown.”

The Blockchain Recovery Investment Consortium (BRIC), as Celsius’s asset recovery manager, announced the settlement, indicating it successfully secured a payment for the Celsius estate to benefit creditors.

Tether, the stablecoin issuer, has paid $299.5 million to resolve claims stemming from the Celsius Network bankruptcy estate, a figure significantly lower than the nearly $4.5 billion in Bitcoin Celsius initially sought. This settlement concludes an adversary proceeding filed in August 2024 in the U.S. Bankruptcy Court for the Southern District of New York.

Background of the Dispute

The lawsuit, initiated by Celsius in August 2024, alleged that Tether improperly liquidated Bitcoin collateral prior to Celsius’s July 2022 bankruptcy filing. Celsius claimed that Tether failed to provide a contractually required 10-hour window to deposit additional collateral before liquidating the Bitcoin, thereby destroying Celsius’s residual interest.

Tether, on the other hand, maintained that its actions were lawful under a 2022 agreement. This agreement mandated Celsius to post additional collateral if Bitcoin prices declined. Tether asserted that it liquidated the Bitcoin at Celsius’s direction to cover an $815 million debt after Celsius failed to meet margin requirements.

A federal judge had ruled in July that the lawsuit against Tether could proceed, leading to the recent settlement. Paolo Ardoino, Tether’s CEO, confirmed the resolution of “all issues” related to the Celsius bankruptcy suit via an X post on Tuesday.

Role of BRIC in Asset Recovery

The Blockchain Recovery Investment Consortium (BRIC), a partnership between investment firms GXD Labs and VanEck, announced the settlement. BRIC was established in early 2023 with the specific goal of maximizing asset recovery in complex crypto bankruptcy cases.

Following Celsius’s emergence from bankruptcy protection in January 2024, BRIC was appointed as the complex asset recovery manager and litigation administrator. The consortium continues to oversee a portfolio of illiquid and litigation assets for the Celsius estate during its wind-down phase, working to benefit creditors.

Former Celsius CEO’s Conviction

In a related development, Celsius Network co-founder and former CEO Alex Mashinsky was sentenced in May to 12 years in prison. He faced charges of securities and commodities fraud for misusing customer funds and manipulating the price of the lender’s CEL token. Mashinsky also forfeited rights to any claims from the bankruptcy proceedings in June.

Settlement Details

The $299.5 million payment represents a fraction of the approximately 39,542 Bitcoin—valued at nearly $4.5 billion at the time of the lawsuit—that Celsius had originally sought to recover. Tether had previously dismissed Celsius’s lawsuit as a “baseless shakedown.”