- Celsius assets from the interest-bearing ‘Earn’ belong to the crypto lender and not the customers.
- Judge Martin Glenn made it clear that Celsius takes possession of crypto assets deposited into Earn.
- Celsius held around $4.2 billion in various cryptocurrencies in its Earn product as of July 2022, $23 million of the assets are held in stablecoins.
Celsius, a bankrupt crypto lender owns $4.2 billion worth of cryptocurrencies in its Earn product. The presiding judge ruled in favor of the lender and stated that assets deposited to its interest-bearing products belong to the lender.
Also read: Bitcoin price holds steady after FOMC minutes release, will BTC rally soon?
Celsius owns customer deposits to interest-bearing ‘Earn’ product
Celsius Network LLC is a bankrupt crypto lender headquartered in New Jersey. The platform offered interest-bearing ‘Earn’ assets to customers and as of July 2022, the lender held $4.2 billion worth of cryptocurrencies of which $23 million are held in stablecoins like USD Tether (USDT) and USD Coin (USDC).
The recent court ruling in the bankrupt crypto lender’s case has raised questions on whether customer deposits to exchange products belong to them in the event of a bankruptcy. Martin Glenn, the Chief US bankruptcy judge in New York said, in a court order, that Celsius’ terms of service make it clear that the platform takes possession of deposits into its Earn product.
The ruling dealt a heavy blow to users hoping to recover their funds from the bankrupt firm. Judge Glenn wrote,
The Court concludes, based on Celsius’s unambiguous Terms of Use, and subject to any reserved defenses, that when the cryptocurrency assets (including stablecoins, discussed in detail below) were deposited in Earn Accounts, the cryptocurrency assets became Celsius’s property; and the cryptocurrency assets remaining in the Earn Accounts on the Petition Date became property of the Debtors’ bankruptcy estates (the 'Estates').
The ruling sets a precedent for crypto investors using similar products across other platforms, that suffered a fallout from the spreading FTX contagion. The Judge’s statement allows Celsius to control user assets in its ‘Earn’ product.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
VanEck sees Bitcoin reaching $61 trillion market cap, Marathon buys $100 million BTC
Bitcoin declined by 1% on Thursday following asset manager VanEck's forecast that the top digital asset will reach a $61 trillion market capitalization by 2050.
Ethereum Classic price sets for a rally following retest of key support
ETC edges higher by 2.3% and trades around $22.60 at the time of writing on Friday after testing a key support area the day before. On-chain data showing increased account growth suggests a bullish move ahead. Ethereum Classic price faced rejection by the daily resistance level of $25.13 earlier this week.
Celebrity meme coins lose their shine
Celebrity meme coins report by Jupiter Slorg on Thursday shows that these tokens have been in deep waters since early July after experiencing heavy growth in June. In a recent analysis, Jupiter Slorg revealed that celebrity meme coins are down by an average of 94% from their all-time highs.
Ripple gains 5%, Mark Cuban says Kamala Harris’ nomination could affect SEC lawsuit
Ripple (XRP) made a comeback above key psychological resistance early on Wednesday. Crypto traders are optimistic after the Ethereum Exchange Traded Fund (ETF) launch. Entrepreneur and investor Mark Cuban recently shared his comments on how Kamala Harris’ nomination to the Presidential elections could influence crypto regulation.
Bitcoin: Will BTC manage to recover from recent market turmoil?
Bitcoin recovers to $67,000 on Friday after finding support around $63,500 a day before. Still, BTC losses over 1.50% on the week as Mt. Gox persists in transferring Bitcoin to exchanges.