Celsius Bankruptcy Judge Orders Return of Certain Crypto Assets to Clients

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Dec 7 (Reuters) – A U.S. bankruptcy judge ruled on Wednesday that some customers of crypto lender Celsius Network should get their deposits back, relieving a relatively small group of customers whose deposits have never been mixed with other funds Celsius.

U.S. Bankruptcy Judge Martin Glenn is considering broader questions about ownership of crypto assets deposited with Celsius.

Its decision on Wednesday was limited to customers who had non-interest-bearing deposit accounts, whose funds were not commingled with other Celsius assets, and whose accounts were too small for Celsius to seek to recover to repay. other customers, according to the Celsius official. creditors committee.

The creditors’ committee had previously estimated that the amount at stake for securities account holders was $50 million.

Judge Glenn has yet to rule on ownership of the Celsius accounts to “earn” or “retain”.

Earning accounts, which paid interest to customers and allowed Celsius to use customer funds to make loans, was the default account type at Celsius before regulatory investigations forced it to change course at first. of 2022.

These regulatory investigations, which alleged that the won accounts were an unregistered securities offering, caused Celsius to set up non-interest bearing deposit accounts and withhold accounts.

New Jersey-based Celsius froze withdrawals in June, citing “extreme” market conditions, cutting off access to savings for individual investors. When it filed for Chapter 11 bankruptcy in July, Celsius reported $4.3 billion in assets and $5.5 billion in liabilities, mostly owed to customers.

Reporting by Dietrich Knauth; Editing by Lincoln Feast

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