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Insolvency practitioners hired by Celsius Network argue that users gave up legal rights to their funds the moment they deposited them on the platform.
In mid-July, cryptocurrency lender Celsius filed
to the Southern District of New York court filing for immediate bankruptcy, according to
provisions of Title 11 of the US Code, which protectDuring the trial, the company's assets are protected from investor claims. Celsius' bankruptcy hearings officially began on July 18, kicking off a long battle to restructure the company.
The start of court hearings in the Celsius case wasclients some hope that they will be able to get their funds back. However, already at the first meeting, users were explained that their hopes were in vain.
Attorneys Kirkland & Ellis, legalThe firm representing Celsius in court argued that retail users do not have legal rights to their cryptocurrency because they accepted the terms of service and transferred ownership of their crypto assets to Celsius when they registered on the platform.
Lawyers argue that usersagreed to the Earn and Borrow account terms of service and gave the Celsius Network platform the right to do whatever they wanted with their crypto assets. Including the sale, use as collateral for obtaining a loan of any assets that are deposited on the platform.
If the court upholds Kirkland & Ellis, then more than 1.5 million users who placed their assets on Celsius will lose them completely.
The general situation is aggravated by the fact thatOne company in the cryptocurrency lender Celsius ecosystem, Celsius Mining, has filed for protection from creditors. CoinShares analyst Matthew Kimmell said:
fear that “the sale of about 120,000 Celsius Mining miners will increase pressure on falling prices for cryptocurrency mining equipment and, in general, affect the value of crypto assets.”
