Connect with us

FEATURED

Why Celsius Earn user deposits belong to the firm

Published

on

“Who owns the cryptocurrency assets deposited in Earn Accounts by Celsius’s account holders before the July 15, 2022 petition date?” 

The United States Bankruptcy Court Southern District Of New York on Wednesday released a document detailing Celsius’ claim and that of its creditors. “The issue of ownership of the assets in the Earn Accounts is a contract law issue,” the document stated. 

Celsius (Debtors) claim that it owns the cryptocurrency assets deposited in Earn Accounts and are now the property of the Estates. While, Earn account holders claim that rather than Celsius, the cryptocurrency assets in the Earn Accounts belong to Account Holders and “the cryptocurrency assets should promptly be returned to them.”

Celsius holds that the crypto assets in the Earn Account are property of the estate, following the acceptance of the Terms of Use (version 8), by its Account Holders when they opened their accounts. Also, the firm argues that it has the right to sell the stablecoins part of the Earn Assets, stating “because the Earn Assets, including stablecoins, are property of the Estates, the Debtors can sell stablecoins to create liquidity to fund administrative expenses associated with these bankruptcy cases.” 

The document analyzed that as of July 10, 2022, the value of the assets held by Earn Accounts in Celsius was worth approximately $4.2 billion for cryptocurrency assets and $23 million for stablecoins as of 23 September. Celsius had approximately 600,000 accounts in its Earn program (“Earn Program,” and such assets, including any proceeds thereof, the “Earn Assets” and such accounts, the “Earn Accounts”).

Based on Celsius’s Terms of Use which was described by the document as unambiguous, the court concluded that “when the cryptocurrency assets (including stablecoins) were deposited in Earn Accounts, the cryptocurrency assets became Celsius’s property; and the cryptocurrency assets remaining in the Earn Accounts on the Petition Date became the property of the Debtors’ bankruptcy estates (the “Estates”).” 

However, the Court finds that the Debtors may sell stablecoins outside of the ordinary course of business.  Moreso, “creditors will have every opportunity to have a full hearing on the merits of these arguments during the claims resolution process,” the court ordered. 

Aside from the Earn Account, Celsius has custody which the court on December 7, 2022, ordered that the firm return $44 million in crypto to holders of the custody account (Celsius’ custody program).

A report had it that “the monies of these users were not mingled with other funds held in the lending protocol.” Furthermore, Celsius advisers and stakeholders agreed that “monies in the designated accounts belong to customers and not the platform.” 

Read also; 

Barry Silbert given deadline to Genesis’s withdrawal solution; denies borrowing

What do you think of this article? Share comments below. 

0 0 votes
Article Rating
Advertisement Earnathon.com
Click to comment
0 0 votes
Article Rating
Subscribe
Notify of
guest

0 Comments
Inline Feedbacks
View all comments

Latest Episode on Inside Blockchain

Crypto News Update

Crypto Street

Advertisement



Trending

ALL Sections

Recent Posts

0
Would love your thoughts, please comment.x
()
x