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ANALYSIS: How Celsius Ruling Affects Customer Crypto in Ch. 11

Jan. 13, 2023, 10:00 AM

A recent SDNY bankruptcy court ruling in a case involving the digital assets of bankrupt crypto lending company Celsius Network won’t necessarily provide a roadmap for rulings in current and future crypto bankruptcy cases. Instead, the widely anticipated ruling illustrates the staying power of some fundamental principles of bankruptcy and contract law in the digital age.

Judge Martin Glenn held on Jan. 4 that certain digital assets in the Celsius Network case—deposited by the company’s customers in approximately 600,000 “Earn Accounts” with a total value of $4.2 billion as of the petition date—aren’t property of the account holders, ...