Judge Rules Customers‘ Crypto Assets Part of Celsius Network Bankruptcy Estate

– A bankruptcy judge ruled that customers who had interest-bearing accounts on Celsius Network had turned over control of their assets to the crypto lender, meaning the deposits are part of its bankruptcy estate.
– U.S. Bankruptcy Judge Martin Glenn said in a court order Wednesday that Celsius‘ terms of service made it clear that it took possession of crypto assets deposited into its Earn product.
– The ruling dealt a blow to customers who were hoping to recoup their deposits, as Celsius held around $4.2 billion worth of crypto assets at the time of its bankruptcy filing.

On Wednesday, a bankruptcy judge ruled that customers who had interest-bearing accounts on Celsius Network had turned over control of their assets to the crypto lender, meaning the deposits are part of its bankruptcy estate. U.S. Bankruptcy Judge Martin Glenn made the ruling in a court order, noting that the terms of service of Celsius Network had made it clear that it took possession of crypto assets deposited into its Earn product. The ruling was a major setback for customers who had been hoping to recoup their deposits, as Celsius held around $4.2 billion worth of crypto assets at the time of its bankruptcy filing.

Although the ruling was disappointing for many customers, it was not unexpected. Over the past few weeks, there had been signs that the judge would side with the bankrupt crypto lender. In the weeks leading up to the ruling, the judge had taken into consideration a wide range of evidence, including documents, emails, and testimony from executives at Celsius. The evidence showed that the company had indeed taken possession of customers‘ assets, though it had not been clear whether those assets would be part of the bankruptcy estate.

The judge’s decision was a significant victory for Celsius, which had argued that its customers had voluntarily given up control of their assets when they deposited them into their accounts. This argument had been supported by the company’s terms of service, which stated that customers had relinquished control of their assets when they deposited them into their accounts. The judge agreed with the company’s argument, noting that the terms of service had been clearly laid out and accepted by the customers.

The ruling has far-reaching implications for the crypto industry as a whole. It serves as a warning to customers that they need to be aware of the terms of service of any crypto service they use, and that they should be careful when giving up control of their assets. It also serves as a reminder that crypto lenders should ensure that their terms of service are clear and easy to understand, so that customers can make informed decisions about their deposits.

Overall, the ruling is a win for Celsius, but it is a setback for customers who had been hoping to recoup their deposits. It is a reminder of the importance of being aware of the terms of service of any crypto service, and of the need to be cautious when giving up control of one’s assets.