Celsius Investor Cries as Bankruptcy Judge Martin Glenn Prompted his Decision

Bankruptcy Judge Martin Glenn killed the hopes of crypto investors willing refunds from Celsius Network. Assets in the “Earn accounts” belong to Celsius, customers are owners, per the ruling on December 4, 2022.

As written in Celsius’ term of use, the decision turned out as “unambiguous provision”, describes the Judge. Version 8 of the company’s agreement of usage, which 99.86% of Earn Account holders approved for, claimed that the company has “all right and title to such Eligible Digital Assets, including ownership rights.”

Following the collapse of major token TerraUSD in May 2022, the crypto lending firm filed for bankruptcy in mid-July last year. “Today’s filing follows the difficult but necessary decision by Celsius last month to pause withdrawals, swaps, and transfers on its platform to stabilise its business and protect its customers,” told the members of the special committee of the board of directors on that event, per The Guardian. 

The U.S. based company had almost $167 million in cash to resolve problems of liquidity to back certain operations during the restructuring process. Also, the entity accounted for total assets and liabilities between $1bn to $10bn. 

According to Axois, Celsius had 600,000 accounts in its Earn program when it filed for bankruptcy under Chapter 11, which collectively held $4.2 bn in assets reported in July 2022. But another aspect, Investors with Earn accounts have been and remain creditors of Celsius. That means the company stills is payable, but the exact amount is undisclosed yet. 

“The Court finds that there was a valid contract between Celsius Account Holders and Celsius and that the contract terms unambiguously transferred all right and title of digital assets to Celsius,” as per the decision. 

Celsius froze withdrawals and transfers, amid “extreme” market situation, leaving over 1.7 million customers unable to get their funds back from the company. Strict investigation by Texas, Washington, and New Jersey to unsolve the riddle of what went wrong behind the case, according to CNN. 

Judge Glenn said, “To be clear, this finding does not mean holders of Earn Assets will get nothing from the Debtors,” he added that  “The amount of allowed unsecured claims is subject to later determination in this case (through the claims allowance process) and may potentially include damages asserted by Account Holders.” 

The crypto market lost almost $2 trillion in value between November 2021 till hot days of 2022. Furthermore, Celsius native token CEL slumped more than 79% in the matter of six months as of July 2022. 

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

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