Celsius Earn Assets belong to a bankrupt company, not users

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A Federal Inclusion Court has decided that crypto-assets that are stored on the “Earn” accounts of Celsius Network do not belong to the customers. Instead, the funds on the interest -bearing accounts of the bankruptcy cryptocurrency meat platform belong.

In a 45-page written decision, Martin Glenn, the top US bankruptcy judge in the southern district of New York, found that Celsius is the owner of the $ 4.2 billion in crypto assets. The judgment has created an important precedent that the users of the platform do not have their coins if they use certain products and services.

property of the estate of money

The Celsius' Earn program made it possible to pay users to deposit crypto-assets such as Bitcoin, Ethereum and Tether and to be paid for every week with the interest earned. Customers who had parked their credit at Celsius' rental service lost access to these funds in June when the company piled up withdrawals, citing extreme market conditions.

Celsius had 600,000 accounts in his Earn program when chapter 11 applied last summer, which brings the assets to $ 4.2 billion in July 2022. Stable coins made up almost $ 23 million of the total amount in September last year. The entire fund in question has now been declared the property of the estate.

glen wrote,

"The court comes to the basis of the clear terms of use of Celsius and subject to any reservations that the cryptocurrency assets (including stable coins, which are discussed in detail below) have been paid into earl accounts, the cryptocurrency assets were owned by Celsius; the EARN accounts remained, became the property of the bankruptcy mass of the debtors (the "estates"). "

Celsius and his customers in court for the last month argued in court with customers for ownership of the stored crypto assets, since they wanted to sell stable coins worth around $ 18 million, the proceeds of which are to be used to finance the administrative costs for the next few months.

The latest court decision claimed that Celsius had "proven a good business reason for the approval of the sale and thus approved the sale". However, this step was rejected by the state supervisory authorities and the office of the US faithower.

objection

The account holder of the Earn program rejected Celsius's arguments, but argued that the terms of use for the accounts were “ambiguous” and that ownership of the assets could not be demonstrated without taking into account additional evidence. This included numerous statements by the company's former CEO, Alex Mashinksy.

Richter Glenn, on the other hand, claimed that the sale of stablecoins Celsius would help finance his bankruptcy proceedings and added that the company quickly exhausted its available funds.

The property decision comes almost a month after the insolvency judge has instructed the competitive company, funds worth $ 44 million that were not part of his profitable accounts to repay its customers.

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