A U.S. Bankruptcy Court judge has ruled that Celsius Network may proceed with critical claims in its lawsuit against Tether, allowing the crypto lender to seek recovery of over 57,000 BTC—now worth approximately $4 billion. The June 30 order from Judge Martin Glenn denied motions to dismiss counts involving preferential and fraudulent transfers and permitted Celsius to pursue breach of contract claims related to Tether's collateral liquidation practices.

The contested bitcoin falls into three main categories:

1. Collateral Return Shortfall: Celsius had posted nearly 16,737 BTC as extra collateral, of which only 1,079 BTC was returned—leaving 15,658 BTC in dispute.

2. Cross-Collateral Transfers: An initial 10,700 BTC posted for USDT loans, with 2,228 BTC alleged as excess.

3. Unauthorized Liquidation: The most significant portion—39,542 BTC—was reportedly liquidated by Tether on June 13, 2022, without honoring a 10-hour notice clause, resulting in immediate losses when sold below market value.

   
   

🏛️ Court’s Decision Breakdown

• Counts I & II (Preferential Transfers): Stand, enabling analysis of whether Tether unfairly prioritized itself over other creditor.

• Counts V & VI (Fraudulent Transfers): Also upheld for trial.

• Count III (Breach of Contract): Allowed to proceed, pending factual determination.

• Count IV (Covenant of Good Faith/Fair Dealing): Dismissed without prejudice—Celsius may revise and refile.

Judge Glenn emphasized the presence of U.S.-based personnel, operations, and communications, which establish jurisdiction, rejecting Tether's argument of…