According to a recent report published by the Wall Street Journal, a bankruptcy judge by the name of Martin Glenn has ruled that the $4.2b in cryptocurrencies deposited in interest-bearing accounts owned by Celsius Network belong to the company. This decision went against the wishes of thousands of customers and resolved an important legal question regarding crypto-related bankruptcies.
The question of who owns rights of ownership to digital currencies at failed crypto exchanges, trading companies, and other platforms is at the center of the chapter 11 cases that have been filed by Celsius and other companies that went bankrupt in the past year, namely FTX and Three Arrows Capital.
According to the judge’s verdict, each company’s ownership rights to the cryptoassets of its customers are laid out in their terms of service, and the judge said that the contract that Celsius has with its users is clear regarding the company’s ownership rights.
Courts that oversee bankruptcies have barely scratched the surface of deciphering what those terms and conditions of use mean for the tens of billions of dollars worth of cryptocurrencies that are stuck on bankrupt companies.
Customers have been quite vocal about their desire to have their cryptocurrency returned to them as soon as possible, saying that the assets should not be considered part of the Celsius company’s debts.
The attorneys representing the company, on the other hand, maintained that the terms of service, which customers had to agree to by clicking a button on their mobile devices, provided Celsius the ownership rights to the assets, allowing the company to lend, sell, pledge, and use the funds for investment operations.
