A US court has ruled that the cryptocurrencies in Celsius depository accounts belong to the company and not to its customers.
The US court sided with the bankrupt Celsius Network, ruling that the cryptocurrency, which is stored on interest deposits, belongs to the company, not its customers. It is reported by The Wall Street Journal (WSJ), citing a court order.
The ruling means that the bankrupt lending crypto giant is free to decide what to do with the $4.2 billion in crypto that is stuck in the litigation. As the judge said, each firm’s rights to its clients’ assets are spelled out in the terms of use, and in the case of Celsius, such rights were “clearly” spelled out.
Celsius clients, amid the collapse of the company, tried to urgently return their investments, as they argued that the cryptocurrency was not the private property of the company. However, the legal representatives of Celsius drew attention to the fact that at the time of registration on Celsius, users agreed to the terms of use. According to the terms, the company has the right to sell or lend client assets for investment purposes.
According to the WSJ, the court ruling concerns the assets of 600,000 Celsius clients. Earlier, top managers of Celsius stated that they intend to sell off part of the client’s assets in order to cover the costs of the lawsuit. For example, it was previously known that just four months of bankruptcy of Celsius could enrich lawyers by almost $53 million.
Celsius froze the withdrawal of client assets on June 12, and a month later the company went bankrupt. In June, several analysts said at once that the lending platform has liquidity problems. At the same time, representatives of Celsius assured that the suspension of the withdrawal of funds was supposed to help “stabilize liquidity”, but did not specify the details of the incident.
In late November, a forensic auditor concluded that Celsius management was mixing client assets with its own funds. Moreover, Celsius did not automatically rebalance assets on accounts that participated in the Celsius Earn interest program. As the auditor found out, the lender manually reconciled the addresses.
Source: CryptoNewsHerald.com
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