Celsius Network has initiated legal proceedings against Tether, the issuer of a stablecoin, on the grounds of purportedly engaging in fraudulent and advantageous practices to transfer around $2.4 billion worth of Bitcoin.
Paolo Ardoino, the CEO of Celsius Network, has offered a lucid explanation of the matter, affirming that Celsius was among the clients that received USDT from the company.
The arrangement entailed the provision of Bitcoin as security in return for USDT, a stablecoin pegged to the US dollar and created by Tether. If the value of Bitcoin fell below the margin call price, the borrower had to offer further collateral.
Tether may liquidate the customer’s investment if additional collateral is not provided. Celsius Network has adopted a policy of unparalleled risk control by embracing over-collateralization in assets such as Bitcoin.
In 2022, Celsius Network requested the Bitcoin held as collateral from the issuer of USDT. The provider of the stablecoin liquidated the Bitcoin and refunded the remaining monies to the lender, contending that the allegation of fraud lacks validity.
