In the words of Judge Martin, “Under unambiguous provisions in Terms Version 8, a clickwrap contract governed by New York law, Celsius held “all right and title to such Eligible Digital Assets, including ownership rights” in the cryptocurrency assets (including stablecoins) in the Earn Accounts.“
Martin Glenn, the federal judge presiding over the Celsius bankruptcy case, ruled that the assets locked in interest-bearing Earn accounts belong to Celsius.
In the court order issued on January 4, the bankruptcy judge called Celsius’ terms of service “unambiguous,” noting that the terms granted Celsius ownership over the Earn accounts. He added that the assets held in these accounts became a part of Celsius’ bankruptcy estates after the petition date.
Judge Martin has also authorized Celsius to sell its $18M worth of stablecoin holdings. The proceeds from the sale will be used to fund the firm’s administrative expenses for the coming months.
Meanwhile, the ruling does not include the $700M worth of crypto assets held as collateral against fiat loans.
Celsius held over $4.2B in the 600K Earn accounts before it filed for bankruptcy in July 2022, with stablecoins accounting for $23M from this sum. The matter of ownership over Celsius’ Earn accounts has been a subject of dispute between the firm and its users for a long time.
The court order also stated that Celsius does not own enough funds to repay all its users, adding,
“Most of the Account Holders are left as unsecured creditors and may recover only a small percentage of their claims.”
