I’m pleased to share that a New York bankruptcy judge has just given me the green light to move forward with the bulk of my $4.3 billion lawsuit against Tether. This is a significant win for us.
We allege that in June 2022—just as we were pausing withdrawals during our financial crisis—Tether liquidated nearly 40,000 BTC we held as collateral. They didn’t allow us the full 10-hour window the contract guaranteed to post additional collateral, even though we had sufficient bitcoin reserves on our balance sheet at the time . Had we been given the chance, we could’ve prevented that sale, which took place near the bottom of the crypto market.
Tether, of course, has dismissed our suit as a “shakedown,” claiming we directed the liquidation ourselves to close out our USDT position . But the court disagreed.
Chief Bankruptcy Judge Martin Glenn recognized that our allegations—that Tether acted improperly by liquidating without giving us time to meet the collateral call—could constitute a breach of contract. He also acknowledged that the oral permission Tether claims to have had from our former CEO Alex Mashinsky wasn’t enough to override that contract requirement .
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