The Chief Judge of the U.S. Bankruptcy Court for the Southern District of New York ruled earlier this week that based on Celsius'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 Celsius's property; and the cryptocurrency assets remaining in the Earn Accounts on the Petition Date became property of the Debtors' bankruptcy estates (the "Estates"). The States of Alabama, Arkansas, California, Hawaii, Idaho, Maine, North Dakota, Oklahoma, and South Carolina, and the District of Columbia all participated in the proceeding, argued, among other things, that because Celsius is under investigation in several states for marketing securities without necessary registrations and without complying with state regulatory frameworks and federal law, and therefore the Celsius could not rely on the arguably unlawful Terms of Use to determine the purported ownership of these assets and what rights they have in them. The case is In re Celsius Network LLC, No. 22-10964 (MG). Comments are closed.
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