According to a court ruling, some customers of the Celsius Network cryptocurrency lender will have their deposits returned. The news fell on Wednesday, bringing relief to those affected. As a reminder, bankruptcy judge Martin Glenn is the author of the decision. Indeed, it is he who deliberates on issues related to the ownership of cryptoassets deposited with Celsius.
The reasons for the court’s decision
According to the Celsius official, Wednesday’s decision only applies to customers who held unpaid deposit accounts. This includes those whose money was segregated from other Celsius assets and whose accounts were too small. The purpose of the decision is to prevent Celsius from recovering these funds in order to reimburse other customers. According to the creditors’ committee, the total amount at stake is approximately $50 million. With respect to ownership of Celsius’ earn and hold accounts, Judge Glenn has yet to make a decision.
Before regulatory investigations caused Celsius to change course in early 2022, “earn” accounts were the company’s default account type. These accounts paid interest to consumers and allowed Celsius to use customer money to make loans. However, following regulatory investigations, Celsius set up unremunerated deposit accounts with hold facilities. In fact, the investigations revealed that the so-called “earn” accounts constituted an unregistered offer of securities.
A decision that only affects a small number of customers
The decision states that Celsius cannot return the funds if the transfers were less than $7,500. Unfortunately, many clients do not meet the oddly strict criteria set by the court overseeing Celsius’ bankruptcy. Therefore, they are excluded from the persons to be reimbursed by the judge’s order.
In conclusion, we can see that only the largest depositors will be able to recover their money by cryptocurrencies. The smallest customers, for their part, will once again be penalized.
Receive a digest of news in the world of cryptocurrencies by subscribing to our new service ofdaily and weekly so you don’t miss any of the essential Tremplin.io!