Cryptocurrency

Celsius Network Acquires Ownership of Customer Cryptocurrency Deposits

  • Now, Celsius can take the control of $4.2B in cryptocurrency that consumers invested in its Earn program. 
  • Celsius has over 600,000 accounts in its Earn program as of July 10, 2022.

A U.S. bankruptcy judge determined on Wednesday that Celsius Network controls the majority of the cryptocurrency that users deposited onto its online platform. This implies that most Celsius users will be last in line for repayment in the crypto lender’s bankruptcy.

According to a 45-page petition from the U.S. Bankruptcy Court Southern District of New York, the decision grants Celsius ownership of the $4.2 billion in cryptocurrencies that customers invested into its high-interest Earn program. 

Celsius’ Earn program allowed users to deposit cryptocurrencies such as (BTC), (ETH), and (USDT) in exchange for weekly interest payments. The platform offered up to 18% annual interest depending on the time horizon and token.

Celsius Network’s Wins Over Earn Account Assets

According to the petition, the bankrupt crypto lender, Celsius has over 600,000 accounts in its Earn program as of July 10, 2022, with a total value of about $4.2 billion. The stablecoin share of that worth was about $23 million. However, the judge ruled that all of that is now the estate’s property or Celsius.

The petition also states that all the cryptocurrency assets, including stablecoins, deposited into Earn Accounts became Celsius’ property due to the “unambiguous” terms and conditions of Celsius.

The decision contrasts sharply with the contention made by many Celsius clients who insisted that the money they deducted from their accounts belonged to them. As it attempted to sell around $18 million worth of stablecoins from Earn accounts to support its organization, the platform engaged in a legal battle with users last month over ownership of the deposited funds. This allows Celsius to sell those assets.

Furthermore, it appears unlikely that any customers will be able to appeal the court’s decision and recover their money since, according to the filing, “there simply will not be enough value available to compensate all account holders in full.”

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