The Blockchain Recovery Investment Consortium (BRIC), a collaboration between investment firms GXD Labs and VanEck, has announced that Tether, a leading stablecoin issuer, has agreed to pay $299.5 million to settle claims arising from the Celsius Network bankruptcy case.
This payment addresses an adversarial proceeding initiated in August 2024 in the U.S. Bankruptcy Court for the Southern District of New York, and represents only a small portion of the funds that Celsius aimed to recover from Tether.
Tether previously criticized Celsius Network’s lawsuit, which sought the recovery of about 39,542 Bitcoin—valued at nearly $4.5 billion at the time of writing—labeling it a “baseless shakedown.” The lawsuit, filed in August 2024, contended that Tether acted improperly by liquidating Bitcoin collateral before Celsius filed for bankruptcy in July 2022.
As the issuer of the USDT stablecoin, Tether claimed it acted within the bounds of a 2022 agreement that mandated Celsius to provide additional collateral when Bitcoin prices fell. When Celsius failed to meet the required margin, Tether asserted that it liquidated their Bitcoin under their direction to settle an $815 million debt.
Celsius countered that Tether did not allow the contractually obligated 10-hour period for additional collateral deposits before proceeding with the liquidation, thus eliminating Celsius’s remaining interest. A federal judge ruled in July that the lawsuit against Tether could move forward.
On Tuesday, Tether CEO Paolo Ardoino announced on X that the company had resolved âall mattersâ regarding the Celsius bankruptcy litigation. Decrypt reached out to confirm the $299.5 million settlement amount, but did not receive an immediate response.
âWe are delighted to have concluded Celsiusâs adversary action and associated claims against Tether,â stated GXD Labs Managing Partner David Proman. âAdditionally, we appreciate the swift resolution of this settlement.â
Founded in early 2023, BRIC aims to enhance asset recovery efforts in intricate cryptocurrency bankruptcy cases. Following Celsius’s exit from bankruptcy protection in January 2024, BRIC was appointed as the complex asset recovery manager and litigation overseer by the debtors and the committee of unsecured creditors.
Judge Says $4 Billion Celsius Lawsuit Against Tether Can Proceed
The consortium continues to manage a range of illiquid and litigated assets for the Celsius estate during its dissolution process, working to serve the interests of creditors.
Alex Mashinsky, co-founder and former CEO of Celsius Network, was sentenced to 12 years in prison in May for charges related to securities and commodities fraud, connected to the misappropriation of customer funds and manipulating the value of the lenderâs CEL token. In June, he renounced all claims to any proceeds from the bankruptcy proceedings.
