Did Celsius users give up their legal rights to their cryptocurrency?

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Last Updated on July 19, 2022 by Bitfinsider

Celsius Networks, a crypto lender, filed for Chapter 11 bankruptcy last week, leaving a $1.2 billion hole on its balance sheet. The company has been struggling with its restructuring plans, and depositors may not get their money back, according to reports.

Celsius lawyers have now confirmed that the 1.7 million registered users from over 100 countries have relinquished the legal right to their cryptocurrency deposited into Earn and Borrow accounts. Celsius had its first bankruptcy hearing on Monday, July 18, during which its lawyers from Kirkland law firm revealed some details.

According to the lawyers, depositors with Earn and Borrow accounts have transferred the title of their coins in accordance with the terms of service. As a result, Celsius can “use, sell, pledge, and rehypothecate those coins.” However, this could only apply to users’ Celsius Earn Program accounts.

Another legal consideration is whether Custody account holders retain ownership of crypto coins. Celsius’ terms of service state that the company cannot use coins in custody accounts without the user’s permission. Nonetheless, the lawyers questioned this in court in order to clarify the situation. They inquired:

Celsius launched its custody program for non-accredited US investors in April. This was due to the fact that some states in the United States had issued cease and desist orders regarding Celsius’s Earn program.

Celsius’s bankruptcy website now includes a presentation slide. According to the company, customers will have the option of recovering cash at a reduced rate or going long in cryptocurrency.


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Disclaimer: The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, legal, tax or other advice. Investing in or trading cryptocurrency or stocks comes with a risk of financial loss.


Hardware wallets are safe and secure devices that can be used offline. They keep your cryptocurrency offline, making it impossible for you to be hacked. To find out more on the leading hardware wallets, you may view our reviews here: Ledger & Trezor
Disclaimer: The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, legal, tax or other advice. Investing in or trading cryptocurrency or stocks comes with a risk of financial loss.

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