Celsius

💲 In a dramatic turn for the cryptocurrency legal landscape, a New York court has granted Celsius permission to proceed with a $4 billion lawsuit against Tether, alleging a contentious “fire sale” of over 39,500 BTC in June 2022. ⚖️ Filed on July 2, 2025, the lawsuit claims Tether sold the Bitcoin—valued at approximately $800 million at the time—to offset Celsius’s $812 million debt, bypassing agreed procedures during Celsius’s bankruptcy proceedings. This ruling has reignited debates over stablecoin transparency and market manipulation. 📉

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🔍 Celsius argues that Tether’s unilateral action destabilized its financial position, exacerbating losses during a market downturn. 📊 The sale, executed when Bitcoin traded around $20,000, netted proceeds used to settle debts, but Celsius contends this violated contractual terms requiring mutual consent. Tether, the issuer of USDT with a $120 billion market cap, has yet to comment officially, though posts on X suggest growing public skepticism about its reserves. 🌍 The lawsuit’s scale—seeking $4 billion—reflects the stakes, with Celsius aiming to recover funds for creditors amid its ongoing restructuring.

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💰 The case highlights broader concerns about stablecoin operations. Regulatory scrutiny has intensified, with the SEC and CFTC probing Tether’s practices since 2021. 📈 Some analysts link this to a recent $220,000 USDC-to-USDT swap loss due to MEV (Miner Extractable Value) exploitation, underscoring vulnerabilities in stablecoin ecosystems. Celsius’s legal victory could set a precedent, pressuring Tether to disclose more about its Bitcoin holdings and redemption processes. 🚀 However, Tether’s defenders argue the sale was a legitimate debt settlement, and the court battle may drag on, given the company’s resources.

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🔧 The crypto community is divided. X sentiment ranges from calls for Tether’s accountability to skepticism about Celsius’s claims, given its own financial mismanagement. 📌 This development coincides with bullish market moves, like a whale buying 1,345 BTC worth $144 million on Binance, and Grayscale’s ETF conversion approval, suggesting a resilient market despite legal turbulence. Will Celsius prevail, or will Tether weather the storm? The outcome could reshape stablecoin trust and regulation.

#Celsius #Tether #CryptoLawsuit

Breaking news 📢📢
Alex Mashinsky, the former CEO of Celsius, has agreed to relinquish all claims to the assets of the bankrupt crypto lender, facilitating further distributions to creditors. This agreement, submitted to the U.S. Bankruptcy Court for the Southern District of New York, bars Mashinsky and three associated entities from receiving any bankruptcy proceeds. All claims made by Mashinsky will be withdrawn and will not receive any distribution under the Chapter 11 plan. Consequently, he and his related entities will be permanently excluded from any recovery in the Celsius bankruptcy, allowing the reserved assets to be redistributed to other creditors. The court will maintain oversight of the distribution process while Mashinsky serves a 12-year prison sentence for defrauding customers and manipulating the CEL token's price. Celsius filed for Chapter 11 in July 2022 due to a liquidity crisis and has since transitioned to a recovery-focused entity, distributing over $2.5 billion to around 251,000 creditors by August 2024.

Alex Mashinsky, the founder and former CEO of the cryptocurrency lending platform Celsius Network, has been sentenced to 12 years in federal prison for orchestrating a multi-billion-dollar fraud scheme that misled investors and manipulated the market.
🏦 What Happened?
Mashinsky launched Celsius in 2017, promoting it as a safe, high-yield alternative to traditional banking. The platform attracted over $25 billion in customer assets by offering interest rates as high as 18.6% on crypto deposits. However, in July 2022, Celsius collapsed, freezing $4.7 billion in customer funds and revealing a $1.2 billion financial gap.

In December 2024, former Celsius CEO Alex Mashinsky pleaded guilty to securities fraud and commodities fraud. He admitted to:
1 Misleading customers about the financial health of Celsius and the safety of their investments.
2 Using customer funds for high-risk investments without proper disclosure.
3 Manipulating the price of Celsius’s native token (CEL) by orchestrating large-scale purchases to inflate its value, while secretly selling his own holdings for personal gain.
On May 8, 2025, U.S. District Judge John G. Koeltl sentenced Mashinsky to 12 years in federal prison. Prosecutors had sought a 20-year sentence, emphasizing the deliberate and deceptive nature of his actions and his lack of remorse. The judge noted that the fraud was the result of deliberate decisions rather than market conditions or negligence.
📉 The Fallout
The collapse of Celsius left many investors, including retail customers, with significant losses. At its peak, Celsius managed over $25 billion in assets, but its bankruptcy in 2022 left a substantial financial gap, with only about 60% of customer funds partially recovered.
Do you think 12 years is enough for crypto fraud on this scale?
#crypto #newscrypto #Fraud_alert #Celsius #AlexMashinsky