A judge has ruled that Celsius Network owns the $4.2 billion worth of cryptocurrency that was deposited by its customers.
This allows the bankrupt platform to use the funds as it wishes. The ruling also classifies Earn program customers, who had deposited their crypto in the program in order to earn interest, as unsecured debtors under bankruptcy law.
It is unlikely that there will be enough funds to fully repay all customers, and they will have to argue that they own the cryptocurrency in their accounts in order to recover any of their claims.
The judge also approved the sale of $18 million worth of stablecoins held in Earn accounts, despite objections from the US states that the sale was unnecessary as Celsius still had sufficient funds to continue operations for a few more months.
This case could set a precedent for how customer cryptocurrency is handled in bankruptcy proceedings in the US.
