Friday 30 September 2022
Home / none / Dozens of Celsius clients ask US court to recover $22.5M in crypto

Dozens of Celsius clients ask US court to recover $22.5M in crypto

The bankrupt cryptocurrency lender Celsius Network is facing more legal issues as disgruntled clients are taking action to recover their funds after the platform froze withdrawals in June.

On Wednesday, an ad hoc group of 64 custodial account holders at Celsius filed a complaint with the United States Bankruptcy Court for the Southern District of New York to recover their assets.

According to court documents, the creditors seek to recover more than $22.5 million worth of cryptocurrency assets collectively held in Celsius’ custody service. The group is represented by bankruptcy-focused law firm Togut, Segal & Segal.

The plaintiffs noted that Celsius has “not honored any withdrawals from any programs,” including custody services. According to the complaint, that contradicts the “plain language of the debtors’ terms of use,” as they provide that title to custody assets “always remains with the user.”

According to Celsius’ terms of use, the right to any digital assets in its custody wallet shall “at all times remain” with customers and not be transferred to the company.

“Celsius will not transfer, sell, loan or otherwise rehypothecate eligible digital assets held in a custody wallet unless specifically instructed by you, except as required by valid court order, competent regulatory agency, government agency or applicable law,” the statement reads. The terms of use were last revised in April 2022, they note.

Related: Court filings reveal Celsius will run out of money by October

Celsius is one of the many crypto lending platforms to have experienced major issues amid the ongoing bear market and associated liquidity issues in the crypto lending sector. The company has a $1.2 billion gap in its balance sheet, with most liabilities owed to its users. Celsius filed for Chapter 11 bankruptcy protection in mid-July.

Amid the ongoing legal and liquidity challenges, Celsius filed a lawsuit against major U.S. custodian Prime Trust in late August. The firm argued that Prime Trust failed to return $17 million worth of crypto in June 2021 when it terminated its relationship with the lending firm.

Original Article

About Jude Savage

Check Also

Ethereum Merge was ‘executed flawlessly,’ says Starkware co-founder

As the dust settled over the Ethereum network’s highly-anticipated transition to proof-of-stake (PoS), Eli Ben-Sasson, the co-founder of Starkware, gave his thoughts on its execution and potential for the future. Speaking to Cointelegraph’s Gareth Jenkinson at the Token2049 event, Ben-Sasson shared his thoughts on the current situation post-Merge and how it affects layer-2 projects like Starkware. In addition to that, the executive also gave his thoughts on the adoption and interest for layer-2 products and the crypto winter. Looking back at the Ethereum Merge’s execution, Ben-Sasson rejoiced that the transition was flawless and said things happened as they should. The executive explained that: “The most important thing is that it was executed flawlessly. Everything that was supposed to happen did happen. And none of the things that people were worried about did happen. And that's terrific news.”Additionally, the executive also highlighted the importance of the new Ethereum netw..

Leave a Reply

Your email address will not be published. Required fields are marked *