Richter says Celsius crypto investors don’t own their accounts
#Richter #Celsius #crypto #investors #dont #accounts Welcome to Alaska Green Light Blog, here is the new story we have for you today:
A bankruptcy judge has shattered the dreams of investors hoping to get their crypto funds back from Celsius. It turns out that assets placed on the now-defunct crypto exchange’s highly interesting “earn accounts” belong to Celsius, not the account holders a Wednesday decision by Judge Martin Glenn.
The decision was due to a “clear provision” in a section of Celsius’ Terms of Service, the judge wrote. “All right and title in such eligible digital assets, including ownership rights,” resides with Celsius, according to Version 8 of the company’s terms, to which 99.86% of Earn account holders have agreed, Glenn noted. Celsius’ incredibly shady terms of service also told signers that “you may have no remedy or right” to get your money back – which the company has previously argued protects them from legal grievances.
In practice, Judge Glenn’s decision effectively confirms that stance and means the company has no immediate obligation to repay around 600,000 investors as part of the exchange’s ongoing bankruptcy proceedings. The more than $4.2 billion frozen in Celsius accounts last June do not belong to the people who put them there, they belong to the company that dumped them.
Technically, however, earn account investors spurned could still get some some kind of compensation from Celsius – the verdict means they will be last in line. “To be clear, this determination does not mean that earn asset holders will not receive anything from debtors,” Glenn wrote. “The amount of unsecured claims allowed in this case is subject to a later determination (through the claims adjustment process) and may include damages claimed by account holders.” Additionally, Celsius customers could sue the company, claiming that the terms they signed violate securities laws violated – but this is no guarantee for repayment.
Last but not least, be reminded to always read the fine print (and not convert your actual fiat currency into digital monopoly money) when making any large financial transaction. While this particular decision is unique to Celsius, it highlights a much larger issue within the totally unregulated cryptoverse. Many other platforms have similar conditions for account holders such as Celsius, Aaron Kaplan, a financial attorney and crypto company owner, said the Washington Post. Potential investors need to “understand the risks they are taking when investing their wealth on poorly regulated platforms,” he added.
G/O Media may receive a commission
Celsius lured customers with promises of absurdly high (read: too good to be true) interest rates in excess of 18% that required increasingly risky maneuvers to deliver. The company first halted withdrawals and froze accounts in June 2022. And despite all its attempts to reassure its users, the crypto network filed for Chapter 11 bankruptcy a month later amid a solvency crisis.
The Crypto Market Lost $2 trillion in value between November 2021 and the summer of 2022. The Celsius token, also known as Celsius, plummeted more than 79% in the six months leading up to July 2022, and the exchange kept a large chunk of its total funds in its own, discarded coin. As a bonus, Celsius executives paid out millions of funds before they stopped paying out everyone else.
And if you’re thinking this all sounds sketchy and Ponzi-esque, know that almost every state regulator will agree with you. At least 40 states had opened investigations into Celsius by early September 2022. Just yesterday, the New York Attorney General announced a lawsuit against deposed Celsius CEO Alex Mashinsky over allegations of misleading investors. Investors may not get their money back, but Celsius and its executives may get their comeuppance.