News
Judge rules $4.2B belongs to Celsius Judge rules $4.2B belongs to Celsius

Judge rules $4.2B belongs to Celsius

Judge Martin Glenn ruled that the funds deposited in Earn Accounts belong to Celsius

Judge rules $4.2B belongs to Celsius

Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.

A new update regarding the Celsius bankruptcy case came on Jan. 4 as Judge Martin Glenn ruled that the funds deposited to Earn Accounts, which amount to $4.2 billion, are the property of Celsius, not the investors.

The rulingย documentย  states:

“The Court concludes, based on Celsiusโ€™s unambiguous Terms of Use, and subject to any reserved defenses, that when the cryptocurrency assets (including stablecoins, discussed in detail below) were deposited in Earn Accounts, the cryptocurrency assets became Celsiusโ€™s property; and the cryptocurrency assets remaining in the Earn Accounts on the Petition Date became property of the Debtorsโ€™ bankruptcy estates (the โ€œEstatesโ€).”

According to the document, Celsius had around 600,000 accounts in its Earn program when the account holders filed the lawsuit. The funds deposited in these accounts amounted to $4.2 billion as of July 10, 2022.

Many account holders argued that they were entitled to their funds and requested full returns. If the Judge were to side with the account holders, this decision would tie their recovery to the distributions to unsecured creditors under a confirmed chapter 11 plan.

Celsius had secured an extension for submitting a chapter 11 reorganization plan on Dec. 6, 2022. The bankrupt lender has until Feb. 15, 2023, to submit a detailed plan disclosing how it will maximize profit for all creditors and stakeholders.

Mentioned in this article