A U.S. federal judge has authorized bankrupt crypto lender Celsius Network to pursue a $4 billion lawsuit against Tether over alleged mishandling of Bitcoin collateral liquidation.
The dispute centers on claims that Tether improperly executed a liquidation event, causing substantial losses to Celsius. This ruling permits legal proceedings examining whether contractual obligations were violated during the transaction.
The case underscores heightened counterparty risk concerns within cryptocurrency markets, particularly regarding settlement reliability and collateral management practices between institutional entities.
Additionally, the lawsuit spotlights inherent challenges in enforcing financial agreements across decentralized finance ecosystems, where traditional legal frameworks intersect with blockchain-based protocols.