Celsius sues Tether, seeking $3.5B over Bitcoin collateral sell-off

slaman29

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Quote from: betswift on August 13, 2024, 02:27:23 AM

Quote from: slaman29 on August 12, 2024, 06:46:53 AM

So one CeFi pretending to be DeFi is suing a centralised fiat company pretending to be a crypto company

And we all wait for years and years for Tether to finally collapse. It will be long more, if USD can sustain their shit printing, Tether can also do the same.

Either way Bitcoin wins

The first sentence got me good Grin

And you can apply it to almost every 'crypto company' you come across and you won't really be wrong lol

I been in here since 2017 and the more a company uses decentralized or crypto in their name and marketing, the more they are NOT crypto and decentralized. So many pretending companies, I love to see them all go bankrupt.

betswift

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Quote from: slaman29 on August 12, 2024, 06:46:53 AM

So one CeFi pretending to be DeFi is suing a centralised fiat company pretending to be a crypto company

And we all wait for years and years for Tether to finally collapse. It will be long more, if USD can sustain their shit printing, Tether can also do the same.

Either way Bitcoin wins

The first sentence got me good Grin

larry_vw_1955

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Quote from: Fiatless on August 12, 2024, 02:20:19 AM

Tether claims they are about $12 billion in backup funds to protect investors if the court goes against them. I don't know how many Bitcoins they own, but they might have to buy to settle their debt. If they buy in the open market it will affect the price of Bitcoin positively.

but do you really think they are going to use their fiat reserves to buy that bitcoin or do you think they will just mint billions of dollars of USDT and buy the bitcoin that way. which way would you do it if you were running tether? because if they do it that way then it raises questions about if that USDT is backed by anything or not.

Quote from: ABCbits on August 12, 2024, 05:36:06 AM

Sounds like good news to Bitcoin investor, ...

i'm not so sure it's good news if tether uses USDT to buy the bitcoin though. there's questions about if the USDT would be backed by anything or not. it's like letting the fox guard the henhouse. if they have to buy it, then it should be done at arms length where they have to pay for it in fiat.

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Quote from: anarkiboy on August 12, 2024, 02:34:36 AM

Quote from: larry_vw_1955 on August 11, 2024, 11:09:52 PM

...Tether loaned it a specific amount of Tether (the company’s stablecoin backed by the United States dollar).

You know they are not fully backed by USD ? they even stated it on their website Cheesy

And I think they lack proper, updated auditing (they do it themself) so it's more like backed by promises.
It's like: My cat has 115 Billion USD, Trust me. Grin

Tether collapsing would be very interesting Wink

There have been many theories and many doubts surrounding USDT but to be fair, so far we have no concrete evidence to support our suspicions. News of Tether's fraud and demise have been around for years but they persist to this day and consistently rake in billions of dollars in revenue each business quarter.

The cryptocurrency industry is becoming more regulated and controlled and Tether no longer has a monopoly on the market, they are facing competition from many different stablecoins. So I wonder, if they really have problems, why haven't any agencies or opponents exposed their true nature?

https://www.binance.com/en/square/post/11578157228385

slaman29

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So one CeFi pretending to be DeFi is suing a centralised fiat company pretending to be a crypto company

And we all wait for years and years for Tether to finally collapse. It will be long more, if USD can sustain their shit printing, Tether can also do the same.

Either way Bitcoin wins

betswift

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Quote from: ABCbits on August 12, 2024, 05:36:06 AM

Quote from: larry_vw_1955 on August 11, 2024, 11:09:52 PM

Tether is kind of dangerous to bitcoin I think. Because if tether has to repay the 39,542 BTC, I'm not sure if they have it. What if they have to go and buy it on the open market?

Sounds like good news to Bitcoin investor, unless Celcius also dump those BTC on open market as part of bankruptcy process. Although only based on what CoinTelegraph said, it's hard to image who'll win in this case.

We don't know all the details (and we probably won't) but the whole situation is surely interesting to invest the time in.

Yamane_Keto

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Quote from: Knight Hider on August 12, 2024, 05:28:02 AM

Why did Tether sell the collateral?

These are claims but according to Tether, Bitcoin is held as collateral and since the price of Bitcoin has dropped and Celsius has not provided any more collateral, Bitcoin has been sold at the collateral value.

Quote from: ABCbits on August 12, 2024, 05:36:06 AM

Sounds like good news to Bitcoin investor, unless Celcius also dump those BTC on open market as part of bankruptcy process. Although only based on what CoinTelegraph said, it's hard to image who'll win in this case.

Collateral terms will determine who wins the claims but the recent drop in the price of Bitcoin may have affected many Bitcoin collaterals.

DaveF

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Sounds like the people @ Celsius don't understand how a secured loan works.
If the price of BTC fell they should have had a certain amount of time to send more to Tether

The amount of time should be spelled out in a contract and if Tether had to tell Celsius that they needed to send more should also be in there.

I would think that Tether would have wording in the contract that if there was a rapid fall in price they could liquidate at any time. That is standard in most collateral contacts.

Either way it's on average less then 10% of the daily BTC trading volume. Not enough to make that big a difference in the price.

-Dave

ABCbits

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Quote from: larry_vw_1955 on August 11, 2024, 11:09:52 PM

Tether is kind of dangerous to bitcoin I think. Because if tether has to repay the 39,542 BTC, I'm not sure if they have it. What if they have to go and buy it on the open market?

Sounds like good news to Bitcoin investor, unless Celcius also dump those BTC on open market as part of bankruptcy process. Although only based on what CoinTelegraph said, it's hard to image who'll win in this case.

Knight Hider

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Why did Tether sell the collateral?

Yamane_Keto

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Quote from: larry_vw_1955 on August 11, 2024, 11:09:52 PM

Tether is kind of dangerous to bitcoin I think. Because if tether has to repay the 39,542 BTC, I'm not sure if they have it. What if they have to go and buy it on the open market?

There is no need for that, according to Tether's justification, they were given these tokens with a guarantee of 39,542.42 BTC, and when the value of Bitcoin fell and Celsius was unable to provide more guarantees, Tether sold Bitcoin in order to pay the value of the tokens given to Celsius.

Quote

As the price of Bitcoin dropped, and per the two parties’ agreement, Celsius was required to provide further collateral to avoid liquidation.

According to the lawsuit, Celsius claims Tether liquidated the BTC at a price point that almost exactly covered the debt without giving it the opportunity to provide additional collateral.

Dealing with cryptocurrency collateral lending is very risky and may result in losses if the collateral value decreases.

anarkiboy

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Quote from: larry_vw_1955 on August 11, 2024, 11:09:52 PM

...Tether loaned it a specific amount of Tether (the company’s stablecoin backed by the United States dollar).

You know they are not fully backed by USD ? they even stated it on their website Cheesy

And I think they lack proper, updated auditing (they do it themself) so it's more like backed by promises.
It's like: My cat has 115 Billion USD, Trust me. Grin

Tether collapsing would be very interesting Wink

Fiatless

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Quote from: larry_vw_1955 on August 11, 2024, 11:09:52 PM

Tether is kind of dangerous to bitcoin I think. Because if tether has to repay the 39,542 BTC, I'm not sure if they have it. What if they have to go and buy it on the open market?

Tether claims they are about $12 billion in backup funds to protect investors if the court goes against them. I don't know how many Bitcoins they own, but they might have to buy to settle their debt. If they buy in the open market it will affect the price of Bitcoin positively. Just as the news of dumps makes the price drop, this news will bring the reverse. Both parties might also agree to settle with the fiat equivalent of Bitcoin which will have no effect on Bitcoin market.

Quote from: avikz on August 12, 2024, 12:44:52 AM

So I don't think they will have to buy it from the open market in case the court case goes against them which is highly likely to happen. I am more worried about the sell off as a part of the liquidation process of Celsius. Not now, but eventually it will come to the market.

The case might not go against Tether if they can prove that Celsius violated the terms of the contract. If the agreement states that Tether has the right to liquidate the BTC if Celsius fails to bring additional collateral, then the latter has no case.

avikz

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Quote from: larry_vw_1955 on August 11, 2024, 11:09:52 PM

What if they have to go and buy it on the open market?

That will be a good thing for Bitcoin, isn't it? Such kind of buying from the open market will surely push Bitcoin price upward, at least temporarily.

As per the released audited report dated 30 June, Tether actually holds around 80,667 Bitcoin (4,734,040,881 USD in value) as reserve. You can visit the link below and open the latest report.

https://tether.to/en/transparency/?tab=reports

So I don't think they will have to buy it from the open market in case the court case goes against them which is highly likely to happen. I am more worried about the sell off as a part of the liquidation process of Celsius. Not now, but eventually it will come to the market.

larry_vw_1955

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The lawsuit alleges that, during Celsius’ bankruptcy proceedings, Tether loaned it a specific amount of Tether (the company’s stablecoin backed by the United States dollar). In return for this loan, Celsius sent Tether 39,542.42 BTC in collateral.

https://cointelegraph.com/news/celsius-sues-tether-seeking-3-5b-over-bitcoin-collateral-selloff

Tether is kind of dangerous to bitcoin I think. Because if tether has to repay the 39,542 BTC, I'm not sure if they have it. What if they have to go and buy it on the open market?

Topic: Celsius sues Tether, seeking $3.5B over Bitcoin collateral sell-off (Read 195 times)