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Celsius sues Tether over a historic Bitcoin collateral agreement, Binance is back online in India but offline in Venezuela, and a Hong Kong lawmaker calls for a new type of bank to accommodate digital asset firms.
Defunct crypto lending platform Celsius is suing Tether in an attempt to recoup almost 40,000 Bitcoin that it transferred to the stablecoin issuer during the crypto meltdown of 2022.
插莽泭 by Celsius, Tether broke the terms of a lending agreement that the two partners signed in 2020, after liquidating thousands of Bitcoin that belonged to Celsius without authorisation.
Celsius lawyers have alleged five counts in the civil action, including fraudulent transfers and breach of contract.
The lawsuit begins by stating that Tether was critical to the Celsius business model, which allowed customers to earn interest on crypto-assets deposited to its platform.
In order to ensure that these interest payments were paid on time and in full, Celsius would at times generate cash by lending its users Bitcoin to Tether in return for USDT.
At the peak of this arrangement, the lawsuit notes, Celsius transferred 39,542 Bitcoin to Tether as collateral. That same Bitcoin is today worth $2.2bn, but on June 13, 2022, the day the agreement was allegedly broken, it was worth $800m.
Nonetheless, Celsius is seeking to recoup the Bitcoin at today's prices.
The TerraUSD contagion泭
In May 2022, following the collapse of the TerraUSD stablecoin, heavy selling spread across the crypto markets, causing the value of all crypto-assets to plummet.
As the price of Bitcoin fell, so too did the value of the collateral that Celsius had posted to Tether for its borrowings of USDT.
While Celsius initially sent more Bitcoin to Tether to top-up the value of its collateral, Tether eventually liquidated the Bitcoin to cut its losses.
Celsius alleges that Tethers decision to liquidate violated the terms of the lending agreement signed in 2020 and amended in 2022, which should have allowed Celsius 10 hours to post additional collateral prior to liquidation.
By liquidating the Bitcoin, Tether insulated itself against the impact of Celsius's subsequent bankruptcy, the plaintiffs note, and improved its financial position at Celsiuss expense.
In response, Tether has vowed to defend itself against the lawsuit, describing it as a shakedown from its former partner.
Tether argues that the lawsuit is not supported by the underlying agreement and also relies on a misapplication of the relevant statutes.
Rather than recognise the clear validity of the agreement entered into years before Celsius bankruptcy, this lawsuit seeks to improperly impose the costs of Celsius mismanagement and failure on Tether, the company said in a泭.
Tether also raised jurisdictional questions over the lawsuit, which it said it will look forward to responding to in court.
As weve said many times, Tether will never fall prey to shameless litigation money grabs, the company said.
We will vigorously defend ourselves against the unwarranted allegations made against us, and we expect to prevail in this litigation.
In July 2023, Celsius entered a record $4.7bn泭settlement with the Federal Trade Commission (FTC) after being accused of duping its customers as to the safety of the platform and squandering their deposits.
Similarly, Tether is currently embroiled in a lawsuit in the US brought by a group of investors who accuse Tether of manipulating the crypto markets by issuing unbacked stablecoins.
Binance back online in India, but offline in Venezuela
Binance has that it is back online in India after successfully registering with the Financial Intelligence Unit (FIU) as an anti-money laundering (AML) reporting entity.
The announcement brings to an end several months in limbo for Binance, which applied for the registration in May after being banned from the country for operating illegally.
The泭 led to a $2.2m fine against Binance the payment of which became a condition for receiving the authorisation from the FIU.
Binance said India is now the 19th market worldwide where the crypto exchange has registered with the local regulator.泭
This registration underscores Binances commitment to adhering to AML standards and fostering a secure, transparent and efficient ecosystem, the company said.
As Binance expands in India, it aims to foster responsible growth and contribute to the global evolution of digital assets while elevating local market standards and ensuring stronger user protections.
Meanwhile, in Venezuela, Binance has been泭 following government action against foreign companies that are perceived to have meddled in the countrys presidential election.
X, for example, has also been taken offline for a period of ten days, with President Nicholas Maduro泭 the platform of spreading violence, hatred and attacking Venezuela from abroad.
Hong Kong banks must open up to crypto, says lawmaker
A lawmaker in Hong Kong has泭 the territorys banks for being unwilling to open accounts for digital asset companies.
Johnny Ng, a member of the Hong Kong Legislative Council, is also the co-founder of G-Rocket, a local accelerator programme for blockchain and Web3 companies.
Ng said that a recent G-Rocket survey found that Hong Kongs digital asset sector is being held back by a lack of access to banking services.
He called on the Hong Kong Monetary Authority (HKMA) to establish a new category of bank a virtual asset/digital asset bank as soon as possible, to ensure the island retains its status as a global hub for blockchain businesses.
