US bankruptcy court decides that Celsius deposits belong to the company-Ordinance

A New York insolvency court has decided that the deposits on high-interest accounts belong to Celsius, the competitive former cryptocurrency credit company, which applied for insolvency protection according to Chapter in July. The decision creates a precedent that could influence the status of other, similar cases in which crypto companies such as Blockfi and FTX are involved.

Celsius acquires the ownership of user deposits

A US bankruptcy court has made an important decision in the conflict, the Celsius, a former company for cryptocurrency loans, and its customers keep its ownership of deposits. Judge Martin Glenn from an bankruptcy court in New York, In favor of the company, it is explained that it has the right to these funds, which allows him to use the assets in any way, including rental, sale and pledge of these assets for investment purposes.

The company had an application for the sale of $ 23 million Stashcoin supply on September 15, and this decision paves the way for the company to complete this operation. The decision states that Celsius' terms of use, an agreement that all users have to agree to before they are operated by the company, were “clear” in order to justify ownership of it in favor of the company.

affected users and consequences

The judgment could affect other cases in which companies are involved who have used bankruptcy performance in accordance with Chapter 11, such as Blockfi and FTX. 600,000 customers of the credit company are affected by this decision that were part of the EARN program, which brought high interest rates on their accounts, which contained $ 4.2 billion in cryptocurrency. These customers are now classified as an undecided creditor, which may affect the amount and importance of their demands in the future.

This can use the company to use part of the funds to finance its procedures according to Chapter 11. Before that, before insolvency courts, the company had declared that it could only finance its company with its current financing until March.

The Celsius's insolvency proceedings also affected the privacy of its customers, since a file was published in October in which the user names, transactions and stocks of all users of the stock exchange are listed. More than 18.6 gigabyte data corresponds to more than 14,000 customers of the stock exchange disclosed at that time, whereby the situation was classified according to some users as one of the "most outrageous data protection injuries in crypto history".

What do you think about the judgment regarding ownership of the funds stored in Celsius accounts? Tell us in the comment area below.

Sergio Göschenko

sergio is a cryptocurrency journalist based in Venezuela. He describes himself as late in the game and entered the cryptosphere when the price increase took place in December 2017. He has a background as a computer engineer, lives in Venezuela and is affected by the cryptocurrency boom on a social level. It offers a different perspective on the crypto success and how it helps those who have no bank account and are under-supplied.

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