Stablecoin issuer Tether has agreed to pay $299.5 million to Celsius Network’s bankruptcy estate, resolving claims related to the crypto lender’s 2022 collapse and potentially opening a new chapter in the stablecoin liability debate.
The Blockchain Recovery Investment Consortium (BRIC) – a joint venture between asset manager VanEck and GXD Labs, a subsidiary of Atlas Grove Partners – announcement settlement on Tuesday. The recovery ends a years-long dispute over Bitcoin (BTC) transfers of guarantees and liquidations which preceded The high-profile bankruptcy of Celsius in July 2022.
BRIC was created in early 2023 to help maximize creditor recovery from bankrupt digital asset platforms. She was named Asset Recovery Manager and Litigation Administrator by the Celsius Debtors and Unsecured Creditors Committee in January 2024, after the company exited bankruptcy protection.
Celsius previously sued Tether, alleging that the stablecoin issuer improperly liquidated Bitcoin collateral that secured USDt-denominated loans (USDT). According to the complaint, Tether sold the guarantee when the price of Bitcoin closely matched the value of Celsius’ debt, thereby erasing Celsius’ position and contributing to its insolvency.
The recently announced $299.5 million settlement represents only a fraction of the approximately $4 billion in claims Celsius had filed in court, following an adversarial proceeding filed in August 2024. In July 2025, the bankruptcy court approved the settlement. broader lawsuit against Tether to proceed, although it is still unclear how this latest recovery will affect these procedures.
The settlement could signal growing legal exposure for stablecoin issuers when acting as counterparties in troubled crypto markets – a development that could reshape how regulators and courts view the liabilities of entities like Tether in the event of future insolvency.
Until now, issuers such as Tether have largely maintained that their role is purely transactional, facilitating the issuance and redemption of tokens rather than taking responsibility for how those tokens are used on exchanges, lenders, or decentralized finance platforms.
Related: BlockFi Bankruptcy Administrator, DOJ Agree to Dismiss $35 Million Lawsuit
Coming out of one of crypto’s darkest chapters
Celsius Network’s bankruptcy was part of a cascading series of crypto failures in 2022 that plunged the industry into a prolonged bear market and ultimately paved the way for FTX’s collapse later that year.
The consequences were particularly severe for former Celsius CEO Alex Mashinsky, who agreed in June. do not claim any assets of the company’s bankruptcy estate and was subsequently sentenced to 12 years in prison on two counts. As Cointelegraph reportedMashinsky reported to prison in September.
Celsius was far from alone. Top Crypto Lenders BlockFi And Travel Digital filed for bankruptcy protection in 2022, followed by Genesis Global Capital the following year.
According to an analysis by the Federal Reserve Bank of Chicago, customers withdrew nearly $13 billion from crypto-asset platforms between May and November 2022, as confidence evaporated in the sector.
“High-yielding products have attracted customers to some platforms,” the Chicago Fed noted, citing interest rates exceeding 17% in some cases — a level that attracted investors during the bull market but proved unsustainable once prices collapsed.
Related: Mashinsky’s 12-year prison sentence sets the tone for law enforcement in the Trump era
