Key Takeaways

• Stablecoin issuer Tether agreed to pay $299.5 million to the Celsius Network bankruptcy estate, resolving a key dispute over Bitcoin collateral liquidations.

• The settlement, announced by the Blockchain Recovery Investment Consortium (BRIC), concludes a years-long legal conflict stemming from Celsius’s 2022 collapse.

• The recovery amount, though a fraction of Celsius’s initial $4 billion claim, could set a precedent for increased legal and regulatory scrutiny regarding stablecoin issuers’ liability in future crypto bankruptcies.

What Is the Tether-Celsius Settlement?

Tether has reached a $299.5 million settlement with the Celsius Network bankruptcy estate. This settlement, announced by the asset recovery group BRIC (a partnership that includes VanEck), resolves a major piece of litigation from the 2022 collapse.

The core of the conflict was Celsius’s claim that Tether improperly liquidated the Bitcoin collateral securing its USDt loans. Specifically, Celsius alleged Tether violated the contract by selling the collateral, which totaled nearly 40,000 Bitcoin, at a time when its value was almost equal to the debt, prematurely erasing Celsius’s equity and contributing to its insolvency.

Though the settlement amount is a fraction of the roughly $4 billion Celsius originally sought, the $299.5 million payment represents a significant, tangible recovery that will be directed to the bankrupt platform’s creditors, following the bankruptcy court’s approval to proceed with the lawsuit in July 2025.

Stablecoin Liability and Future Regulatory Scrutiny

Tether’s $299.5 million settlement is significant because it directly challenges the established view of stablecoin liability. Previously, issuers claimed they were purely transactional and held no legal responsibility for how their tokens were used by third parties like exchanges and lenders in a distressed market.

However, this substantial settlement to resolve claims tied to Celsius’s insolvency now chips away at that long-held shield. Tether’s decision to pay signals a clear, growing legal risk for stablecoin issuers that act as major counterparties in the crypto lending space.

This precedent is crucial. It may compel regulators and courts to fundamentally redefine the responsibilities of entities like Tether in future bankruptcies, likely ushering in new legal frameworks for stablecoin liability.

Emerging from Crypto’s Darkest Chapter

Celsius’s failure was a brutal part of that market meltdown, which also claimed BlockFi, Voyager, and FTX. The fallout was so severe that former CEO Alex Mashinsky is now serving a 12-year prison sentence.

The 2022 crisis saw nearly $13 billion withdrawn from crypto-asset platforms, driven by evaporating confidence after unsustainable high-yield products, with interest rates sometimes exceeding 17%, collapsed.

The successful recovery of funds for creditors, led by BRIC since its appointment in January 2024, is a significant step in winding down one of the sector’s darkest periods. The Tether settlement is a key milestone in maximizing recoveries and providing closure for those affected by the widespread failures of centralized crypto lenders.

Final Thoughts

Tether’s $299.5 million settlement with the Celsius estate is a major creditor recovery milestone and an implicit acknowledgment of potential liability. It serves as a strong signal to the crypto industry and regulators that stablecoin issuers’ roles may be subject to stricter accountability in future insolvency proceedings.

Frequently Asked Questions

What was the main claim Celsius had against Tether?
Celsius alleged that Tether improperly liquidated Bitcoin collateral for loans right before Celsius’s bankruptcy, wiping out their position.

What group led the effort to achieve this settlement?
The Blockchain Recovery Investment Consortium (BRIC), a joint venture between VanEck and GXD Labs, managed the asset recovery.

How might this settlement affect other stablecoin issuers?
It could increase their legal exposure and accountability, potentially leading to new regulatory views on stablecoin issuers’ responsibilities in distressed crypto markets.