The liquidation of the $ 840 million loan Tether gave to Celsius could be scrutinized to determine if the process is valid under bankruptcy law. Financial Times Reported on July 26th.
Stablecoin issuers have revealed that they have regained their loans to Celsius by selling Bitcoin (BTC), which the embarrassed company promised as collateral.
Celsius’ statutory agent asked the court if the bankrupt lender could regain the value of the collateral sold to the company by Tether and other lenders.
and presentation At the Bankruptcy Court in New York, Celsius’ lawyer raised the question, “Can Celsius recover?” .. .. Was the loan clearing completed 90 days before submission? “
The answer to that question is to determine if Tether will need to repay the funds recovered from the sale of Bitcoin mortgages and the status of the secured digital asset loan at the time of bankruptcy.
In general, secured loans require the borrower to pledge assets as collateral for the lender.
A common belief within the crypto space is that a lender can own a crypto asset pledged as collateral and is protected under bankruptcy law.
But legal experts believe the process is not that simple. Bankruptcy lawyer Brandon Hammer told FT:
We are in an area where the law is very uncertain and quite in conflict with the general expectations of the market.
In his view, Tether may be forced to return assets if there is an unsecured claim to the loan.
Another bankruptcy expert at Hunton Andrews Kurth, Tad Davidson, said:
“One of the things to consider is whether the tether is fully protected. Did the tether properly complete the security of its collateral?”
It raises the question of whether Tether has properly established a claim to the asset. If not, the stablecoin issuer may be part of an unsecured creditor, which may lead to a proceeding.
However, another bankruptcy lawyer, Jonathan Cho, pointed out that there is still no traditional way to achieve “full security against Bitcoin.”
