Tether Reaches $299.5 Million Settlement Over Celsius Claim Dispute

One of crypto’s most protracted legal battles has finally concluded. Tether, the leading stablecoin issuer, will pay $299.5 million to resolve years of litigation with the Celsius Network bankruptcy estate. The figure falls substantially short of the $4.5 billion that Celsius originally pursued through its claim against Tether. The Blockchain Recovery Investment Consortium (BRIC)—a joint venture between investment firm VanEck and GXD Labs—announced the resolution, describing it as settling all outstanding disputes between the two parties.

“We are pleased to have resolved Celsius’s adversary proceeding and related claims against Tether,” stated David Proman, managing partner at GXD Labs. This resolution marks a watershed moment for Celsius creditors, though the recovery remains modest relative to the ecosystem damage caused by the platform’s 2022 implosion.

The Celsius Collapse and the Core Claim

Celsius Network was once among the largest cryptocurrency lending platforms until withdrawals froze in mid-2022, culminating in bankruptcy the following month. The Celsius claim against Tether centered on a high-stakes dispute over Bitcoin collateral management. According to Celsius, Tether improperly liquidated approximately 39,500 Bitcoin that served as collateral without providing the contractually required 10-hour notice before selling. This alleged breach, Celsius argued, stripped the lender of any residual equity in the position.

Tether countered that it operated within the bounds of a 2022 agreement permitting liquidation when Celsius failed to meet margin calls as Bitcoin prices declined. When Celsius did not post additional collateral as required, Tether said it disposed of the Bitcoin at Celsius’s direction to recover an $815 million debt owed by the lender. The company characterized the claim as baseless, pushing back firmly against accusations of wrongdoing.

Litigation Timeline and BRIC’s Role

A federal bankruptcy judge in New York greenlit the Celsius claim to proceed in early 2025, despite Tether’s denials of liability. The settlement was negotiated through BRIC, established in early 2023 as a dedicated vehicle for pursuing claims against failed crypto enterprises. The Celsius creditors’ and debtors’ committee appointed BRIC in January 2024 to oversee asset recovery operations and manage ongoing litigation.

The $299.5 million compensation represents a negotiated compromise between the recovery organization and Tether, allowing both sides to avoid protracted trial proceedings. While BRIC secured a meaningful recovery for the estate, the quantum remains a fraction of what the Celsius claim initially demanded.

From Celsius to Broader Reckoning

The Celsius Network’s downfall exposed systemic vulnerabilities in crypto lending practices and became emblematic of the 2022 credit crisis that consumed platforms like Voyager, BlockFi, and FTX. Former Celsius CEO Alex Mashinsky was sentenced to 12 years in prison in May 2025 for fraud and market manipulation, with prosecutors alleging he diverted customer funds and artificially inflated the CEL token price. By June, Mashinsky had agreed to forfeit all claims against the bankruptcy estate.

The ongoing litigation surrounding Celsius and similar failures continues reshaping how courts evaluate cryptocurrency collateral agreements and lending protocols. The resolution of the Celsius claim against Tether signals that recovery mechanisms, while imperfect, are gradually bringing closure to one of crypto’s most consequential collapses. Whether such settlements ultimately serve as deterrents for future misconduct or merely footnotes to cautionary tales remains an open question for the industry.