Tether has made headlines once again by agreeing to pay $299.5 million to settle claims from the Celsius Network bankruptcy estate. This settlement puts an end to a dispute over Bitcoin collateral transfers that took place prior to the crypto lender’s collapse in July 2022.
The Blockchain Recovery Investment Consortium (BRIC), a collaborative effort between asset manager VanEck and GXD Labs, announced the resolution on Tuesday. This settlement is significant, as it is one of the largest recoveries in the ongoing wind-down process of the Celsius bankruptcy.
Originally, Celsius had sought approximately $4 billion in claims against Tether in court proceedings, claiming that the stablecoin issuer liquidated Bitcoin collateral when its value closely matched Celsius’s debt obligations. This action effectively wiped out Celsius’s position, contributing to the lender’s ultimate downfall.
The lawsuit against Tether was filed in August 2024, and the bankruptcy court approved it to move forward in July 2025. The $299.5 million payment, while substantial, is considerably lower than the initial claims, indicating a significant reduction in the expected recovery.
According to BRIC’s announcement, after accounting for legal fees, the actual recovery will be around $240 million, representing only 4.8% of the total claims against Tether. This figure aligns with earlier projections that indicated a minimum expected recovery of $200 million.
One of the notable aspects of this settlement is the legal implications it may have for stablecoin issuers. Historically, companies like Tether have maintained that their role is purely transactional, facilitating the issuance and redemption of tokens without any liability for how those tokens are utilized across various exchanges and decentralized finance platforms. However, this settlement raises questions about potential legal exposure when stablecoin issuers act as counterparties in troubled crypto markets.
The collapse of Celsius was part of a broader wave of failures in the cryptocurrency sector in 2022, which also saw BlockFi and Voyager Digital file for bankruptcy. These events contributed to a significant loss of confidence in the industry, with nearly $13 billion withdrawn from crypto platforms between May and November of that year, as analyzed by the Federal Reserve Bank of Chicago.
Former Celsius CEO Alex Mashinsky faced severe repercussions for his role in the company’s collapse, agreeing in June to forfeit any claims to assets from the bankruptcy estate. In a high-profile criminal case, Mashinsky was sentenced to 12 years in prison for his actions, highlighting the severe consequences stemming from the 2022 crypto failures.
Following its exit from bankruptcy in 2024, Celsius managed to distribute over $3 billion to creditors throughout the wind-down process. BRIC continues to oversee a portfolio of illiquid and litigation assets related to Celsius, previously attempting to acquire the assets of the insolvent lender. However, the remnants of Celsius Network were ultimately sold to rival bidder Fahrenheit in 2023.
The recent settlement effectively concludes the legal disputes in the U.S. Bankruptcy Court for the Southern District of New York, marking a notable moment in the ongoing saga of Celsius Network and the broader implications for the cryptocurrency landscape.
