Celsius lawyers claim users gave up legal rights to their crypto
Celsius’s 1.7 million registered users across over 100 countries gave up title to the crypto they deposited into Earn and Borrow accounts, according to the firm’s lawyers.
At the first bankruptcy hearing for Celsius on July 18, lawyers from the Kirkland law firm led by Pat Nash detailed how retail users with Earn and Borrow accounts transferred the title of their coins to the firm as per its terms of service (ToS). As a result, Celsius is free to “use, sell, pledge, and rehypothecate those coins” as it wishes.
However, a legal question has arisen about whether Custody account holders retain title for their assets. Celsius ToS claims that the firm cannot use coins in Custody accounts without user permission. Still, lawyers questioned whether this holds for crypto that the firm is currently in possession of. In their overview of the case, they asked:
The Custody program was launched in April for non-accredited US investors as some states across the US issued cease and desist orders on Celsius’s Earn program.
Celsius paused withdrawals for all users on June 13 and stopped issuing new loans on July 13.
Attorney David Silver summed up Celsius’s claim to users’ funds in a July 18 tweet. He wrote that users should “stop thinking of it as *your* crypto” because it technically all belongs to the firm.
11) Celsius says that anyone in the EARN program has no crypto that belongs to them (i.e., stop thinking of it as *your* crypto). Celsius is the owner of the crypto assets. Most of the assets in Celsius came in through the EARN program and is part of the estate.
According to a tweet from Financial Times reporter Kadhim Shubber, Nash proclaimed that Celsius users would be “interested in riding out this crypto winter” and let Celsius hold
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