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action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /home4/scienrds/scienceandnerds/wp-includes/functions.php on line 6114Source:https:\/\/techcrunch.com\/2023\/01\/04\/bankruptcy-judge-rules-celsius-network-owns-users-interest-bearing-crypto-accounts\/<\/a><\/br> A federal bankruptcy judge ruled cryptocurrencies deposited into interest-bearing accounts at Celsius Network, a now-bankrupt cryptocurrency lending platform, actually belong to the firm \u2014 thanks to the fine print.<\/p>\n The verdict gives Celsius ownership of the $4.2 billion in cryptocurrency that users deposited into its high-interest Earn program, according to a 45-page filing<\/a> from the U.S. Bankruptcy Court in the Southern District of New York on Wednesday.<\/p>\n With the Earn program, Celsius allowed users to deposit cryptocurrencies like Bitcoin, Ethereum and Tether and receive weekly interest payments. Depending on the time horizon and token, the platform offered as much as 18% interest annually.<\/p>\n Celsius had approximately 600,000 accounts in its Earn program, and the accounts held a collective value of approximately $4.2 billion as of July 10, 2022, the filing noted. About $23 million of that value consisted of stablecoins. But all of that is now property of the estate, aka Celsius, the judge ruled.<\/p>\n Thanks to Celsius\u2019s \u201cunambiguous\u201d terms and conditions, any cryptocurrency assets \u2014 including stablecoins \u2014 that were deposited into Earn Accounts, became Celsius\u2019s property, the filing stated.<\/p>\n Celsius, which was once one of the world\u2019s largest crypto lenders, filed for bankruptcy protection<\/a> in mid-July 2022. At the time, Celsius said it had anywhere between $1 billion and $10 billion in assets and liabilities and more than 100,000 creditors.<\/p>\n Prior to filing for bankruptcy, Celsius froze withdrawals<\/a> for customers in June, citing \u201cextreme market conditions.\u201d That freeze was never lifted. Now the crypto assets held in those accounts are property of Celsius, the judge ruled.<\/p>\n This decision is in stark contrast to the argument thousands of Celsius customers have had in claiming that their deposited funds were, in fact, theirs. Last month, Celsius fought with customers in court over ownership of deposited funds as it wanted to sell<\/a> about $18 million worth of stablecoins from Earn accounts to fund its organization. Now Celsius can sell those assets.<\/p>\n And for those looking to fight the court ruling and get their funds back, it seems unlikely because \u201cthere simply will not be enough value available to repay all Account Holders in full,\u201d the filing stated.<\/p>\n With bankruptcy proceedings, priority to receiving frozen funds is often given to secured creditors. But the filing deems account holders with the Earn program as unsecured creditors of Celsius, which means their recovery depends on the distributions to unsecured creditors under a Chapter 11 bankruptcy plan.<\/p>\n \u201cIf only some Account Holders prevail with their arguments that they own the cryptocurrency assets in their accounts, they hope to recover 100% of their claims, while most of the Account Holders are left as unsecured creditors and may recover only a small percentage of their claims.\u201d<\/p>\n Going forward, this verdict can set a precedent for investors across the crypto industry and what one\u2019s terms of use really<\/em> means for people who deposit onto platforms. This could also point to what may happen with other Chapter 11 bankruptcy proceedings transpiring in the crypto space, like FTX<\/a>, Voyager<\/a> and BlockFi<\/a>, to name a few.<\/p>\n<\/p><\/div>\n <\/br><\/br><\/br><\/p>\n
\nBankruptcy judge rules Celsius Network owns users\u2019 interest-bearing crypto accounts<\/br>
\n2023-01-20 21:49:30<\/br><\/p>\n