Tether Refutes $2.4B Bitcoin Fraud Claims In Celsius Lawsuit
The post Tether Refutes $2.4B Bitcoin Fraud Claims In Celsius Lawsuit appeared on BitcoinEthereumNews.com.
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. 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…
Filed under: News - @ August 11, 2024 3:26 pm