Customers of Celsius’ “Earn” product do not own their assets if they are using certain services or products, according to a recent ruling by Judge Martin Glenn, the Chief U.S. Bankruptcy Judge in the Southern District of New York. The ruling confirms that the assets are part of the company’s bankruptcy estate, as Celsius’s terms of service made it clear that it took possession of the crypto assets deposited into its Earn product. The ruling will have implications for cryptocurrency investors using similar products across other platforms, many of which have also entered bankruptcy in recent months. A hearing on the matter will be held on January 10th, 2023.
According to a recent report, a federal judge in New York has ruled that the assets of customers using Celsius’s “Earn” product, a cryptocurrency interest-bearing service, are considered to be part of the company’s bankruptcy estate. This means that the assets do not belong to the customers, but rather to the bankrupt crypto lender. Judge Martin Glenn, the chief U.S. bankruptcy judge in the Southern District of New York, stated in a court order that the terms of service for the Earn product made it clear that Celsius took possession of the crypto assets deposited into it. This ruling will likely have implications for customers of other crypto platforms that offer similar products, as a number of these companies have also filed for bankruptcy in recent months. The court will hold a hearing on January 10th, 2023 to discuss a motion on the deadline for creditors to submit their claims. The judge also ruled that Celsius can retain control of around $18 million worth of stablecoins, which will be used to fund the company’s administrative costs for the coming months.
In conclusion, a federal judge has ruled that customers of Celsius’s “Earn” product, an interest-bearing cryptocurrency service, do not have ownership of their assets and they are instead part of the company’s bankruptcy estate. The judge cited Celsius’s unambiguous terms of service as the reason for this decision, which has implications for customers using similar products on other platforms that have also entered bankruptcy. This ruling will likely affect the ability of these customers to recoup their funds from the company. The court will hold a hearing on January 10th to discuss the deadline for creditors to submit their claims, with a proposed deadline of February 9th. It is important for cryptocurrency investors to carefully consider the terms of service and ownership of their assets when using these types of services.
