Celsius Wins $299.5 Million From Tether in Bankruptcy Settlement

The payment settles a lawsuit where Celsius originally demanded $4.3 billion—making the final settlement just 7% of what they asked for.

The Blockchain Recovery Investment Consortium (BRIC), which manages Celsius’s bankruptcy assets, announced the deal. BRIC is a partnership between investment firms GXD Labs and VanEck, created specifically to recover money from complex crypto bankruptcies.

Source:@paoloardoino

Tether CEO Paolo Ardoino confirmed the news, saying his company was “pleased to have reached a settlement of all issues related to the Celsius bankruptcy.”

What Celsius Claimed Tether Did Wrong

Celsius filed the lawsuit in August 2024, claiming Tether broke their agreement during the chaotic crypto market crash of 2022. The core issue: Celsius says it put up 39,542 bitcoins as collateral for an $815 million loan from Tether. When Bitcoin prices dropped, their contract required a 10-hour waiting period before Tether could sell the collateral.

Celsius argued that Tether sold their Bitcoin too early—before that 10-hour window ended—and at terrible prices. The sale happened when Bitcoin hit around $20,656 per coin, near the bottom of the market crash. At today’s prices, those bitcoins would be worth over $4 billion.

Tether Fought Back Hard

Tether pushed back against the accusations, calling the lawsuit a “baseless shakedown.” The company said it acted properly under their 2022 agreement. According to Tether, when Celsius couldn’t post more collateral as Bitcoin prices fell, Celsius CEO Alex Mashinsky actually told them to sell the Bitcoin to cover the debt.

Tether tried to get the case thrown out entirely, arguing that U.S. courts didn’t have authority over the dispute since both companies operate offshore. But that strategy failed.

Judge Let the Case Move Forward

In July 2025, Chief Bankruptcy Judge Martin Glenn ruled that Celsius could proceed with most of its claims. The judge found problems with Tether’s defense, particularly the claim that Mashinsky verbally approved the early liquidation.

Judge Glenn said verbal permission was “insufficient” and that failing to honor the 10-hour waiting period could still count as breaking the contract. He also noted that knowing Celsius was in financial trouble didn’t give Tether the right to act independently.

The court found enough connections to the United States—including U.S.-based staff, bank accounts, and communications—to hear the case.

What This Means for Celsius Creditors

While $299.5 million is far less than the billions Celsius wanted, it represents real money for creditors trying to recover their losses. BRIC continues managing Celsius’s bankruptcy estate, working to collect money from various sources to pay back customers who lost funds.

David Proman, Managing Partner of GXD Labs, said the team was “pleased with the timeliness with which the settlement was achieved.”

Celsius has already distributed $2.5 billion to 251,000 creditors since January 2024, covering 93% of all claims. The company emerged from bankruptcy in November 2023 after filing Chapter 11 in July 2022 when it revealed a $1.2 billion hole in its balance sheet.

The Fall of Alex Mashinsky

The Celsius collapse led to criminal charges against founder and former CEO Alex Mashinsky. In May 2025, a federal judge sentenced Mashinsky to 12 years in prison for fraud.

Mashinsky admitted to lying to customers between 2018 and 2022, promising their investments were safe while he secretly sold his own holdings and manipulated the price of Celsius’s CEL token. He also misled investors about the company’s financial health and took risky bets with customer funds.

During his sentencing, prosecutors said Mashinsky “preyed on hope” by convincing people their life savings were safe when they weren’t. As part of his plea deal, Mashinsky gave up any rights to money from the bankruptcy proceedings and agreed to forfeit $48 million.

The Bottom Line

The settlement ends one of the last major legal battles from Celsius’s bankruptcy. While creditors won’t recover everything they lost, the $299.5 million adds to the pool of money being distributed to people who trusted the platform with their crypto.

For Tether, settling eliminates the risk of a much larger judgment and closes a chapter on one of crypto’s biggest collapses. For the industry, the case shows that U.S. courts can reach offshore crypto companies when their actions affect American customers—a message that could shape how these firms operate going forward.