Celsius Network has appealed Judge John Dorsey’s decision that rejected its $2 billion claim against the failed crypto exchange FTX.
This legal fight is part of the ongoing chaos in the cryptocurrency industry, especially after the bankruptcy of both companies. Celsius claims that false statements from FTX leaders and partners hurt its reputation and finances, leading to its bankruptcy in July 2022. The company says that these public statements hurt customer trust, causing big withdrawals and eventually leading to insolvency.
Celsius first aimed for $2 billion in damages, pointing to “unsubstantiated and disparaging statements” made by FTX insiders. FTX argued that the claims were baseless and did not satisfy the requirements for bankruptcy claims.
In December, Celsius changed its claim, lowering the amount to $444 million and concentrating on preferential transfers, stating that some payments made to FTX before it went bankrupt should be returned. Judge Dorsey turned down both claims because of procedural problems, pointing out that Celsius didn’t get court approval for the late change.
This situation highlights the legal battles in the cryptocurrency world as bankrupt companies try to get back their assets and deal with financial losses. Celsius’ actions against FTX show how creditors compete for an advantage in complicated bankruptcy talks. The appeal will be reviewed in the District Court, which is an important step in this legal case.
