Judge: Celsius Must Refund $50M to Users

A judge has ordered Celsius Network to return cryptocurrency in custody accounts to customers. 

U.S. Bankruptcy Judge Martin Glenn told the bankrupt crypto lender that it must return those coins, which were worth $44 million in September, Bloomberg reported Wednesday (Dec. 7). 

“I want this case to move forward,” Glenn said, per the report. “I want creditors to recover as much as they possibly can as soon as they possibly can.” 

Glenn also ordered Celsius Network to return some coins that had been moved from interest-bearing accounts to custody accounts shortly before the firm’s bankruptcy filing. This order applies to the coins involved in transfers that were under $7,500 — a group that was worth about $11 million in September. The others remain with Celsius Network, according to the report. 

Celsius Network still owes billions of dollars’ worth of coins to customers, the report said. 

The moves came after Celsius advisors and stakeholders determined that coins in custody accounts belong to users, per the report. 

Glenn has not yet decided the ownership of crypto that is in interest-bearing accounts at Celsius Network, according to the report. 

PYMNTS reported Monday (Dec. 5) that Glenn will decide if crypto that was put into interest-bearing accounts before the firm’s filing for Chapter 11 in July belongs to the depositors or Celsius. 

Advisers to Celsius said the company’s terms of service told customers they were signing over the ownership of coins placed in the accounts, while some creditors said the terms were ambiguous and had changed over time.

Celsius asked the judge for permission to sell the $18 million worth of crypto to keep paying its bills.

Celsius Network filed for Chapter 11 bankruptcy protection July 13, a month after it had frozen customer accounts.