How Celsius Got a Fraction of What They Wanted: Tether Settles for a Mere $299.5M

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Well, it seems that Celsius thought it was going to make a grand comeback with a tidy sum of $4.3 billion in its pocket, but alas, it has settled for a more modest, yet still impressive, $299.5 million. Yes, that’s less than 7% of what they demanded, but hey, a win is a win, right? 🍾

The Blockchain Recovery Investment Consortium (BRIC), the group tasked with cleaning up Celsius’s financial mess, announced the deal. And who are these noble folks? A merry band of investment firms GXD Labs and VanEck, who joined forces to recover money from the complicated wreckage of crypto bankruptcies. They sound like the Avengers of the blockchain world, don’t they? 🦸‍♂️🦸‍♀️

Tether’s CEO, Paolo Ardoino, casually confirmed the news with the enthusiasm of a person who’s just received a birthday gift they didn’t ask for. He said the company was “pleased to have reached a settlement of all issues related to the Celsius bankruptcy.” I’m sure he’s absolutely thrilled. 🤔

What Celsius Claimed Tether Did Wrong

In August 2024, Celsius filed a lawsuit claiming that Tether had broken their agreement during the chaotic 2022 crypto market crash. The core issue? Well, Celsius put up 39,542 bitcoins as collateral for an $815 million loan from Tether. But when Bitcoin prices plummeted, their contract had a clause that required a 10-hour waiting period before Tether could sell the collateral. Simple, right? But Celsius argued that Tether sold their precious Bitcoins too early, when the price was crashing harder than a poorly timed Netflix binge. They sold the coins when Bitcoin hit around $20,656-a far cry from the $4 billion those coins would be worth today. Talk about a missed opportunity! 💸

Tether Fought Back Hard

But don’t think Tether just sat there twiddling its thumbs while Celsius wailed. Oh no, Tether fired back, calling the lawsuit a “baseless shakedown.” According to Tether, when Celsius couldn’t cough up more collateral as Bitcoin prices fell, Celsius CEO Alex Mashinsky actually told them to sell the Bitcoin to cover the debt. In other words, they were like, “You want to blame us? Well, your CEO gave us the green light!”

Tether even tried to get the whole case thrown out, claiming U.S. courts had no jurisdiction over them since both companies operate offshore. But that little trick didn’t work. Court’s still in session, buddy. 🏛️

Judge Let the Case Move Forward

In July 2025, Chief Bankruptcy Judge Martin Glenn decided that Celsius could press ahead with most of its claims. The judge found issues with Tether’s defense, particularly the part where they said Mashinsky verbally approved the early liquidation. Apparently, verbal agreements aren’t as binding as one might think. Who knew? 😏

The judge also noted that just because Celsius was floundering financially, it didn’t give Tether the right to go rogue. The court even found enough ties to the U.S.-like staff, bank accounts, and communications-to keep the case rolling. So much for the offshore strategy. 🏖️

What This Means for Celsius Creditors

Now, while $299.5 million is a far cry from the billions Celsius hoped for, it’s still cold, hard cash for the creditors who are hoping to claw back some of their losses. BRIC is still managing the bankruptcy assets and working to recover funds from other sources. David Proman, Managing Partner of GXD Labs, shared that he was “pleased with the timeliness” of the settlement. A true master of understatement. 👏

Celsius has already handed out $2.5 billion to 251,000 creditors since January 2024. And yes, you guessed it-93% of all claims have been covered. The company emerged from bankruptcy in November 2023 after revealing a $1.2 billion hole in its balance sheet. Oops. 🕳️

The Fall of Alex Mashinsky

The tale of Celsius’s downfall didn’t end with a mere bankruptcy, oh no. Alex Mashinsky, the once-celebrated CEO, found himself on the wrong side of the law. In May 2025, he was sentenced to 12 years in prison for fraud. And let’s be real-he didn’t exactly come across as a saint. He admitted to lying to customers for years, promising them their investments were safe while secretly offloading his own holdings. Not exactly the behavior of a trustworthy CEO. 😬

During his sentencing, prosecutors described Mashinsky as a man who “preyed on hope” by convincing people their life savings were safe, all while he was secretly playing a dangerous game with their money. As part of his plea deal, he agreed to forfeit a whopping $48 million. What a guy! 💰

The Bottom Line

So, while the $299.5 million settlement doesn’t quite cover all the losses, it’s a step in the right direction for creditors who trusted Celsius with their crypto. For Tether, this settlement is a sigh of relief, avoiding the possibility of an even bigger payout. And for the crypto industry at large, the case sends a strong message that U.S. courts can reach offshore crypto companies when their actions affect American customers. That’ll likely keep everyone on their toes going forward. 👀

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2025-10-15 01:44