Judge Martin Glenn, who is presiding over the Celsius bankruptcy case, ruled on Jan. 4 that the funds in the Celsius interest-bearing Earn program belong to Celsius under the terms of the program\u2019s terms of use. The funds reportedly amount to more than $4 billion.\u00a0<\/p>\n
\u201cThe issue of ownership of the assets in the Earn Accounts is a contract law issue,\u201d the U.S. bankruptcy judge\u00a0wrote, citing the latest version of the Earn program\u2019s terms of use. Those terms state that lending platform Celsius held \u201call right and title to such Eligible Digital Assets, including ownership rights.\u201d <\/p>\n
Related: Core Scientific shuts down 37K mining rigs it was hosting for Celsius<\/em><\/strong><\/p>\n The judge called the terms of use \u201cunambiguous,\u201d and pointed out that, if the funds in question belong to the debtor, their return will depend on a Chapter 11 plan for distributions to unsecured creditors, resulting in a more equitable result than if some of the account holders are declared owners of the funds locked up in the program. The judge concluded:<\/p>\n \u201cAs has been said repeatedly in this opinion, creditor\u2019s rights with respect to various defense to and breach of contract claims are reserved. Creditors will have every opportunity to have a full hearing on the merits of these arguments during the claims resolution process.\u201d <\/p><\/blockquote>\n The court gave Celsius an extension to come up with a Chapter 11 restructuring plan by Feb. 15. Judge Martin ordered the return of $44 million worth of crypto held in customers\u2019 custodial accounts on Dec. 7. Celsius declared bankruptcy July 14.<\/p>\n The ruling makes reference to $18 million worth of stablecoins in the Earn program that Celsius had sought to sell, saying it should be allowed:<\/p>\n \u201cIn the exercise of its business judgment, the Debtors have established a good business reason to permit the sale.\u201d <\/p><\/blockquote>\n The United States Trustee and state securities regulators had argued against allowing that sale, saying Celsius already had the liquidity to operate \u201cover the next few months.\u201d <\/p>\n