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According to a decision by a Celsius bankruptcy judge, account holders do not own their accounts

According to a decision by a Celsius bankruptcy judge, account holders do not own their accounts

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A federal judge has determined that Celsius owns the majority of consumer deposits on its platform.

Glenn’s decision affects 600,000 account holders who owned $4.2 billion in assets in Celsius at the time the company filed for bankruptcy. According to the ruling, Celsius lacks the means to fully compensate these depositors.

Judge Martin Glenn, in his Jan. 4 ruling in the cryptocurrency lender’s bankruptcy case, noted that “based on Celsius’ express terms of use, when the cryptocurrency assets were deposited into Earn accounts, the cryptocurrency assets became property transitioned from Celsius”.

According to the ruling, thousands of Celsius customers were “unsecured creditors,” meaning they had to wait to get their money back.

Advisors to Celsius claimed that the platform’s terms of service informed customers that they would relinquish ownership of the coins deposited in their accounts. However, some creditors claimed the terms were unclear and had evolved over time.

Last month, Celsius applied to the judge for approval to sell $18 million worth of cryptocurrency to help the company pay its bills.

“I understand the dissatisfaction that account holders may feel when they have not read or understood the exact terms of service,” Glenn wrote in a letter Wednesday.

The judge ordered Celsius to provide customers with their $44 million worth of cryptocurrency, which was held in custodial accounts and ordered to be returned last month.

Glenn stated, “I want this case to move forward. “I want creditors to get as much money back as possible as soon as possible.” After the user accounts were suspended, Celsius filed for bankruptcy on July 13. This was one of several cryptocurrency failures over the past year.

As PYMNTS pointed out at the time, the company made a name for itself in the cryptocurrency lending space by promising high returns and claiming that it posed less risk than traditional banks. However, according to PYMNTS, the company ran into trouble after promising high interest rates to cryptocurrency depositors while making substantial loans backed by insufficient collateral. That made the business vulnerable to a market downturn.

To halt a run and customer losses, Celsius banned withdrawals, exchanges, and transfers in June. Board members of the company described the measure as “tough but necessary”.

Summary of the news:

According to a decision by a Celsius bankruptcy judge, account holders do not own their accounts Check all the news and articles from the latest business news updates.

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