Judge Says Celsius Crypto Investors Don’t Own Their Accounts

A bankruptcy judge has dashed the dreams of investors who hoped to get their crypto funds back from Celsius. Assets placed in the now-defunct cryptocurrency exchange’s high-yielding “Earn Accounts” turned out to belong to Celsius, not the account holder. Judgment on Wednesday From Judge Martin Glenn.

The decision resulted in a “clear provision” in one section of Celsius’ terms of service, the judge wrote. “All right and title to such Eligible Digital Assets, including ownership,” is retained by Celsius, version 8 of the company’s terms, which he agreed with 99.86% of Earn account holders. He did, says Glenn. Celsius’ incredibly dubious term It also said to service signers, “You may not have legal remedies or rights to get your money back.”

In fact, Judge Glenn’s ruling effectively confirmed that stance, meaning the company has no immediate obligation to repay the approximately 600,000 investors within the exchange. Ongoing bankruptcy proceedings. of over $4.2 billion What was frozen on the Celsius account last June didn’t belong to the people who put it there, but the property of the company that squandered it.

However, technically, it spurred Earn Account investors to still received some It’s like compensation from Celsius. A verdict means they will be the last to do so. “For clarity, this finding does not mean that Earn Assets owners will get nothing from their debtors,” Glenn wrote. “The amount of an unsecured claim granted is subject to later determination in this case (through the claim granting process) and may potentially include damages claimed by the account holder.” may sue the company and claim that the terms they signed violate securities laws, but that does not guarantee reimbursement.

If nothing else, always remember to read the fine print when it comes to major financial transactions (don’t convert real fiat currency into digital monopoly money). While this particular ruling only applies to Celsius, it highlights a much bigger problem within the fully unregulated Cryptoverse. Many other platforms have similar conditions for account holders as Celsius did/does. Aaron Kaplan, financial lawyer and crypto company owner, told the Washington PostHe added that would-be investors need to “understand the risks involved in depositing assets on poorly regulated platforms.”

Celsius lured customers with promises of ridiculously high (incredibly too high) interest rates of over 18%.company first stop withdrawal Then, in June 2022, the account was frozen.And despite all attempts to reassure users, cryptocurrency networks Filed for Chapter 11 bankruptcy A month later, in the midst of a solvency crisis.

crypto market lost $2 trillion Values ​​from November 2021 to Summer 2022. The Celsius Native Token, also known as Celsius, plummeted by more than 79% in the six months to July 2022, with the exchange holding most of its total funds on its own. crushed coin.As a bonus: Celsius executives cash out millions of funds just before they stop withdrawing for everyone else.

And if all of that sounds sketchy and Ponzi-esque, know that nearly every state regulator agrees with you. At least 40 states have launched investigations into Celsius . Early September 2022Just yesterday, the New York State Attorney General announced a lawsuit It took a stand against Celsius’ deposed CEO Alex Mashinski over misleading investor claims. Investors may not get their money back, but Celsius and his executives may come back.