Bankruptcy Judge Says Celsius Crypto Investors Don't Own Their Accounts
upstart writes:
Bankruptcy Judge Says Celsius Crypto Investors Don't Own Their Accounts:
Your Crypto Money Might Not Legally Belong to You Anymore, Court RulesA sneaky clause in Celsius' terms and conditions made all investments property of the now-defunct crypto trading platform.
A bankruptcy judge has dashed the dreams of investors hoping to retrieve their crypto funds from Celsius. It turns out, assets placed in the now-defunct crypto exchange's high interest "Earn Accounts" belong to Celsius, not the account holders, according to a Wednesday ruling from Judge Martin Glenn.
The decision came down to an "unambiguous provision" in one section of Celsius' terms of use, wrote the judge. "All right and title to such Eligible Digital Assets, including ownership rights," is held by Celsius, said version 8 of the company's terms, which 99.86% of Earn Account holders agreed to, noted Glenn. Celsius' incredibly shady terms of service also stated to signatories that "you may not have any legal remedies or rights," to get your money back-which the company has previously argued protects them from legal complaints.
upstart writes:
Your Crypto Money Might Not Legally Belong to You Anymore, Court Rules:
The cryptocurrency industry has been busy with the sudden collapse of FTX, one of the top crypto exchanges (banks), for almost two months now. Many people still can't get their money out of FTX, and another ruling is more bad news for people using exchanges.
[...] The ruling shouldn't have a sudden effect across the entire industry - it's a ruling about one specific company's terms of service, not a court decision or new law about all crypto companies and exchanges. However, it's possible the terms of service for other crypto exchanges could be interpreted in a similar way. In the United States, the Federal Deposit Insurance Corporation (FDIC) generally protects money stored in traditional (fiat) banks, but there's no regulation like that in place for crypto exchanges operating in the US.
The bankruptcy proceedings for Celsius is another indicator your money probably isn't safe in any crypto exchange. FTX, formerly one of the world's most popular crypto exchanges, is still undergoing bankruptcy and reorganization. The process revealed that much of FTX's funds (including customer money held in the exchange) was provided to sister trading firm Alameda, and FTX itself eventually became insolvent. The sudden collapse of FTX has had a ripple effect, causing a few other high-profile crypto companies to collapse - mostly from holding vast reserves of FTX's crypto token (which is now mostly worthless).
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