Celsius Network Lawyers: “Users have no rights to their crypto assets”

Bankruptcy specialists hired by Celsius Network allege that users waived legal rights to their funds the moment they deposited them on the platform.

In mid-July, cryptocurrency lender Celsius filed
filing for immediate bankruptcy with the Southern District of New York, according to
the provisions of Chapter 11 of the US Code, which protect the company's assets from investor claims during the course of a lawsuit. Celsius' bankruptcy hearings officially began on July 18, setting off a lengthy battle to restructure the company.

The start of court hearings in the Celsius case has given clients some hope that they will be able to recover their funds. However, already at the first meeting, users were told that their hopes were in vain.

Lawyers for Kirkland & Ellis, the law firm representing Celsius in court, said that retail users have no legal rights to their cryptocurrency because they accepted the terms of service and transferred ownership of their Celsius crypto assets at the time of registration on the platform.

Lawyers argue that users agreed to the terms of service for Earn and Borrow accounts and gave the Celsius Network platform the right to do whatever they want 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 the argument of Kirkland & Ellis, then more than 1.5 million users who have placed their assets on Celsius will lose them completely.

Compounding the overall situation is the fact that another company in the Celsius cryptocurrency lender ecosystem, Celsius Mining, has filed for creditor protection. CoinShares analyst Matthew Kimmell
fear that “the sale of about 120,000 Celsius Mining miners will increase pressure on falling prices for cryptocurrency mining equipment and, in general, will affect the value of crypto assets.”