Bankrupt crypto lender Celsius has initiated a series of high-profile lawsuits against several major crypto companies, including Tether, Badger DAO, and Compound. These legal actions aim to recover billions in funds for creditors, with significant implications for the crypto industry.
Points
- Celsius is pursuing lawsuits against Tether, Badger DAO, Compound, and others to reclaim funds for creditors.
- The lawsuit against Tether involves over $2.4 billion in Bitcoin collateral.
- Celsius alleges mismanagement and fraud in its cases against Badger DAO and Compound.
- These legal actions could have far-reaching effects on the involved companies and the broader crypto industry.
Celsius, the once-prominent crypto lender now mired in bankruptcy, has launched a series of lawsuits against some of the biggest names in the cryptocurrency industry. The legal battles, aimed at recovering billions of dollars in funds for Celsius’ creditors, have placed Tether, Badger DAO, Compound, and even relatives of Israeli Prime Minister Benjamin Netanyahu under scrutiny.
The most significant of these lawsuits targets Tether, the world’s largest stablecoin issuer. Celsius is demanding the return of 39,542 Bitcoin, valued at over $2.4 billion, which it alleges was wrongfully liquidated by Tether during the tumultuous market conditions of June 2022. According to Celsius, Tether acted prematurely in liquidating this collateral, failing to give Celsius the full contractual time to meet additional collateral demands. This liquidation, carried out when Bitcoin prices were near their lowest, allegedly resulted in significant losses for Celsius.
Tether has vehemently denied any wrongdoing, labeling the lawsuit as a “shakedown” and asserting confidence in the solidity of its contract and actions. The outcome of this case could have profound implications, not just for Tether, but for the entire stablecoin market, as it touches on the critical issues of collateral management and the legal obligations of lenders and borrowers in volatile markets.
In addition to the Tether lawsuit, Celsius has also filed claims against Badger DAO and Compound Labs. The lawsuit against Badger DAO stems from a $120 million exploit in December 2021, where Celsius lost over $50 million in Bitcoin. Celsius accuses Badger DAO’s founder, Christopher Spadafora, of gross negligence in securing the protocol’s frontend, which allowed the exploit to occur. The lawsuit seeks to hold Badger DAO and its service provider, Cloudflare, accountable for the losses incurred.
Celsius’ legal action against Compound Labs revolves around a liquidation event triggered by a spike in the price of the stablecoin DAI on Coinbase Pro, which was used as Compound’s sole oracle price feed at the time. Celsius claims that this reliance on a single price source led to unnecessary liquidations, resulting in a loss of over 50,000 ETH. This case highlights the risks associated with oracles and the importance of using multiple data sources to ensure accurate price feeds.
These lawsuits are part of a broader strategy by Celsius to reclaim as much value as possible for its creditors. The legal outcomes will likely set precedents for how disputes over collateral and smart contract obligations are resolved in the crypto space. As these cases progress, they will be closely watched by industry participants, legal experts, and regulators, all of whom are keenly interested in the implications for the future of decentralized finance and crypto lending.
解説
- Celsius’ legal actions underscore the complexities and risks inherent in the cryptocurrency industry, particularly in areas like collateral management and smart contract enforcement.
- The lawsuits could set important legal precedents, particularly in the handling of large-scale liquidations and the responsibilities of DeFi platforms and stablecoin issuers.
- For investors and industry participants, these cases highlight the importance of due diligence and the potential for significant legal and financial ramifications in the volatile crypto market.