A U.S. bankruptcy judge made it clear that Celsius customers using its interest-bearing service didn't own their funds in a ruling on Wednesday. nikhileshde reports
A federal judge ruled that customers of Celsius's interest-bearing"Earn" product had turned over control of their assets to the bankrupt crypto lender, meaning they are part of the company's bankruptcy estate.a court order Wednesday
Glenn also wrote that Celsius had"established a good business reason to permit the sale" of about $18 million worth of stablecoins, a move that state regulators and the U.S. Trustee's office had opposed. The proceeds from the sale of these stablecoins would fund Celsius's administrative costs for the next several months.
"The issue of ownership of the assets in the Earn Accounts is a contract law issue. The Debtors and Committee argue that the cryptocurrency assets deposited in Earn Accounts were owned by the Debtors and are now property of the Estates. Many Earn account holders argue that the Account Holders, rather than Celsius, own the cryptocurrency assets in the Earn Accounts and that cryptocurrency assets should promptly be returned to them," Glenn wrote.
Some customers from BlockFi have filed a motion in its bankruptcy proceedings, arguing that they had tried to convert some funds from BlockFi Interest Accounts to Wallet Accounts prior to BlockFi's bankruptcy, but that BlockFi is now trying to reverse some of these transactions.
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