Celsius Network LLC owns the coins that users placed in interest-bearing accounts with the crypto lender prior to its bankruptcy, a federal judge said in a written ruling Wednesday.
(Bloomberg) — Celsius Network LLC owns the coins that users placed in interest-bearing accounts with the crypto lender prior to its bankruptcy, a federal judge said in a written ruling Wednesday.
US Bankruptcy Judge Martin Glenn said the company’s terms of use clearly grant Celsius title to any coins deposited in its Earn program, which allowed users to receive interest on deposits. That means users still locked out of their Earn accounts are unsecured creditors of Celsius and likely won’t get all of their money back.
The interest-bearing accounts held crypto worth $4.2 billion just prior to Celsius’ bankruptcy filing in July. The ruling doesn’t impact users with coins in so-called custody accounts, which did not pay interest.
“This is a gating issue at the center of many disputes in this case,” Glenn wrote.
Beyond impacting creditor recoveries, the ruling means Celsius can sell about $18 million worth of stablecoins held in Earn accounts. The proceeds will help fund the company’s stay in bankruptcy.
The bankruptcy is Celsius Network LLC, 22-10964, US Bankruptcy Court for the Southern District of New York (Manhattan).
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