Celsius files new class action lawsuit in the US
- September 1, 2022
- 0
A group of custody account holders at Celsius Network petitioned the Bankruptcy Court to withdraw their funds. The lawsuit brings together 64 investors with $22.5 million worth of
A group of custody account holders at Celsius Network petitioned the Bankruptcy Court to withdraw their funds.
The lawsuit brings together 64 investors with $22.5 million worth of cryptocurrencies on the custody service Celsius. The group is represented by the law firm Togut, Segal & Segal.
On June 13, the crypto lender suspended withdrawals, swaps and transfers between accounts. A month later, on July 14, Celsius and some of its subsidiaries filed for Chapter 11 bankruptcy.
The platform presented a business reorganization plan focused on using the mining subsidiary’s revenue to pay off creditors’ claims. Celsius’ liabilities exceed the company’s assets by $2.85 billion.
In a class action lawsuit filed by Togut, Segal & Segal, a group of clients are asking the court to issue a determination that requires the platform to allow withdrawals from their custody accounts.
According to the document, these assets are separated from other Celsius products under the “Terms of Use” and customers retain permanent ownership of them.
Plaintiffs said in several hearings that the court “made clear” that the assets in the custody service were not the property of the company and must be returned to investors.
Account holders noted that they have but do not have the required volume and type of cryptocurrencies to meet the platform’s requirements.
“The debtor’s continued refusal to confiscate all assets held in the custody service has created great difficulties for its users, as evidenced by the hundreds of letters and defenses submitted during the trial,” the lawsuit says.
The document states that cryptocurrencies in custody accounts cannot be used to meet investors’ claims in other platform products such as Earn.
Recall that in July, law firm Bragar Eagel & Squire filed a class action lawsuit against Celsius on behalf of investors. The company was accused of misleading users about its “financial products”.
The platform also faced default charges from former DeFi contractor KeyFi, but filed a lawsuit against the firm and its founder in August.
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I’m Sandra Torres, a passionate journalist and content creator. My specialty lies in covering the latest gadgets, trends and tech news for Div Bracket. With over 5 years of experience as a professional writer, I have built up an impressive portfolio of published works that showcase my expertise in this field.
