Celsius Network Sues Prime Trust Over Tokens Worth $17M

On Tuesday, Celsius Network filed a suit against crypto custodian Prime Trust. The organization has tried to retrieve crypto worth $17 million that the bankrupt lender has claimed that its former business partner still holds.

The root of the 54-suit stems from a dispute over assets related to yield product customers of Celsius in Washington and New York, as filed in federal bankruptcy court. Celsius also stated that the two adjourned their agreement in June 2021, Prime Trust held those assets and refunded $119 million to Celsius.

Meanwhile, Prime Trust said Celsius, which had filed for bankruptcy protection quite recently, owes its creditors billions of dollars. The crypto firm is also denying its obligations to transfer 196,268 CEL tokens, 3,740 ETH, 398 BTC, and 2.2 million USDC worth $17 million.

“Upon the commencement of these bankruptcy proceedings, Prime Trust was obligated under the Bankruptcy Code to deliver all property belonging to Celsius that is in Prime Trust’s possession to Celsius, including these remaining crypto assets, and should be ordered to turn them over now pursuant to section 542 of the Bankruptcy Code,” Celsius argued in the filing.

In the filing, Celsius argues that Prime Trust under the Bankruptcy code is required to send Celsisus’s every property in possession of Prime Trust as the bankruptcy proceedings start. The remaining crypto assets are also under its possession and are needed to turn them over now pursuant to section 542 of the Bankruptcy Code. In June 2021, Prime Trust terminated its partnership with Celsius, which it referred to as “red flags.”

The ‘crypto winter’ which was triggered by the dramatic collapse of Terra led to a major downturn in the prices of cryptocurrencies. Flagship currencies such as Bitcoin and Ethereum also experienced a major dip in their prices. In June 2022, Celsius stopped all its withdrawals, swaps, and transfers due to “extreme market conditions.”