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Celsius granted Tether‘s request, but the collateral was again threatened. The lawsuit says that while the lending platform was raising funds during the period specified in the contract, the USDT issuer liquidated the entire collateral within hours.

According to the lawsuit, “amidst the chaos,” on June 13, 2022, then-former Celsius CEO Alex Mashinsky allegedly permitted Tether to liquidate the collateral in an orderly manner. However, the platform noted that the lender never received written consent: Tether’s efforts, of course, are now subject to intervening federal bankruptcy law. Thus, these preferential and fraudulent transfers of Bitcoin should be avoided, and the Bitcoin or its value should be recovered for the benefit of Celsius’s estate.