Court Judge Martin Glenn Determines Celsius to Retain possession of Earn Program Properties
In a series of developments, the crypto lending platform Celsius Network finds itself embroiled in a complex web of legal challenges and investigations.
Judge Martin Glenn, presiding over the Celsius bankruptcy case, has ruled that the crypto assets deposited in Celsius Network's Earn Accounts are the property of the Celsius' bankruptcy estates. This decision has left account holders, who are now unsecured creditors, in a precarious position, with most expecting to recover only a small portion of their claims.
However, a group of Earn account holders are fighting to recover their losses. They are hoping to prove ownership of the crypto assets in their accounts, aiming to recover 100% of their claims. This is based on the premise that the assets were not part of Celsius' assets when the bankruptcy was declared.
The protesting parties also claim that Celsius is under investigation in multiple jurisdictions for potential law-breaking. These investigations, while not detailed in the provided search results, are being conducted by regulatory authorities and relevant financial investigators. The investigations could theoretically make it impossible for the business to rely on the terms of use, adding another layer of complexity to the case.
As of July 10, 2022, approximately 600,000 accounts in Celsius' Earn program possessed crypto assets valued at approximately $4.2 billion. By September 2022, stablecoins worth $23 million were held in the Celsius Earn program.
Judge Martin Glenn ordered Celsius to sell stablecoins worth about $18 million from the Earn accounts. The sale was permitted due to Celsius establishing a good business reason to do so, such as raising funds for the costs related to running the bankruptcy processes.
State regulators argue that Celsius has not adequately disclosed how much of the earnings from stablecoins will go towards funding the mining operation or the GK8 digital asset custody platform. Twelve US states and the District of Columbia have raised concerns about user understanding of Celsius' terms of service.
Judge Martin Glenn suggests that Celsius clients may have grounds to sue the lender for fraud or breach of contract. The judge's suggestion comes amidst questions about the transparency of Celsius' financial practices.
In a surprising turn of events, Celsius' earnings from stablecoins may be used for funding the mining operation or the GK8 digital asset custody platform. This raises further questions about the use of funds and the transparency of Celsius' operations.
As the case unfolds, it remains to be seen how these controversies will impact the future of Celsius Network and its Earn program.
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