• A federal bankruptcy judge has ruled that crypto-assets deposited in Celsius Network’s „Earn“ accounts do not belong to the customers.
• Instead, the funds in the interest-bearing accounts belong to the bankrupt cryptocurrency lending platform.
• The verdict has set an important precedent that the platform’s users do not own their coins when using certain products and services.
Verdict Out: Celsius Earn Assets Belong to Bankrupt Firm, Not Users
A recent court ruling has brought a blow to some users of Celsius Network who were hoping to recover their funds from the company. A 45-page written decision from Chief US Bankruptcy Judge in the Southern District of New York, Martin Glenn, determined that the cryptocurrency lending platform, Celsius, is the owner of the $4.2 billion in crypto-assets deposited in its „Earn“ accounts. This verdict has set an important precedent that the platform’s users do not own their coins when using certain products and services.
Celsius Network’s Earn program allowed users to deposit their cryptocurrency in interest-bearing accounts and receive a reward for allowing their funds to be lent out. In exchange, customers were promised a return on their deposits, depending on the amount they had deposited and the length of time they had been using the platform. The company had put in place various measures to protect its customers‘ funds, such as requiring a minimum deposit amount and providing a maximum of three withdrawals without penalty.
However, the court ruling has now determined that the funds in the interest-bearing accounts do not belong to the customers and instead, are owned by the bankrupt cryptocurrency lending platform. This means that the customers will not be able to reclaim their funds from the company, as the court has found that the money belongs to the estate of the company. This verdict further highlights the importance of understanding the terms and conditions of the services one is using when investing in cryptocurrency, as the ownership of the funds may not always be clear.
It is also a warning sign for users to pay close attention to the platform they are using and to ensure that it is reputable and secure. This recent ruling serves as a reminder that, as with any investment, users should do their research and understand the risks involved before investing their hard-earned money.
The court’s decision has further highlighted the need for increased regulation in the cryptocurrency industry. As cryptocurrency becomes more mainstream, it is important that users are protected and that their funds are secure. Regulatory bodies, such as the Securities and Exchange Commission, should continue to work to ensure that users are protected and that their funds are safe in the event of a bankruptcy or other financial failure.
The recent court ruling has set an important precedent that customers do not own their coins when using certain products and services. It is a reminder to users to be aware of the terms and conditions of the services they are using and to do their research before investing in cryptocurrency. It also illustrates the importance of regulating the industry, to ensure that users are protected and their funds are secure.