For those readers remembering cryptocurrency platform Celsius, here’s a bit of a shock:
More than half a million people who deposited money with collapsed crypto lender Celsius Network have been dealt a major blow to their hopes of recovering their funds, with the judge in the company’s bankruptcy case ruling that the money belongs to Celsius and not to the depositors.
The judge, Martin Glenn, found that Celsius’s terms of use — the lengthy contracts that many websites publish but few consumers read — meant “the cryptocurrency assets became Celsius’s property.” …
The bankruptcy ruling focused specifically on whether Celsius as part of the restructuring can now sell $18 million in so-called stablecoins, a type of virtual currency, to help stay solvent. But its implications are much larger. By ruling that the money in the accounts wasn’t really owned by the 600,000 account holders, the court has basically said they are now just unsecured creditors. And “there simply will not be enough value available to repay” them, Glenn wrote. [WaPo]
And if Celsius worded their agreement in such a way, so will have some of their competitors and brethren. And when this news becomes rampant, will cryptocurrency users and investors rush to read their agreements, and then withdraw from these platforms in one mad rush?
Will we be seeing comparable collapses all across the industry?
I’m guessing the crypto platforms at risk saw Celsius and FTX collapse and are working hard to keep up and plug the holes by modifying their agreements, restraining their urges of greed in preference to those of survival. But one or two may not get it done in time, depending on how quickly the news spreads.
And they may join Celsius in the trashbin of history.
