Celsius 'Earn' Assets Belong to Bankrupt Crypto Lender, Judge Rules

A federal judge ruled that customers of Celsius's interest-bearing "Earn" product had turned over control of their assets to the bankrupt crypto lender, meaning they are part of the company's bankruptcy estate.

Judge Martin Glenn, the chief U.S. bankruptcy judge in the Southern District of New York, said in a court order Wednesday that Celsius's terms of service made it clear it took possession of crypto assets deposited into its Earn product, dealing a blow to some customers hoping to recoup their funds from the company. Celsius held around $4.2 billion in various cryptocurrencies in its Earn product as of July 2022, with $23 million of that being in stablecoins.

"The Court concludes, based on Celsius’s unambiguous Terms of Use, and subject to any reserved defenses, that when the cryptocurrency assets (including stablecoins, discussed in detail below) were deposited in Earn Accounts, the cryptocurrency assets became Celsius’s property; and the cryptocurrency assets remaining in the Earn Accounts on the Petition Date became property of the Debtors’ bankruptcy estates (the 'Estates')," he wrote.

(By Nikhilesh De)

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