• Judge Martin Glenn ruled that the funds deposited in Earn Accounts belong to Celsius.
• The funds deposited in the Earn Accounts amounted to $4.2 billion.
• Celsius has until Feb. 15, 2023, to submit a detailed plan of how it will maximize profit for all creditors and stakeholders.
On January 4, Judge Martin Glenn issued a ruling in the Celsius bankruptcy case, determining that the funds deposited in Earn Accounts, amounting to $4.2 billion, belonged to Celsius and not the investors. The ruling document stated that when the cryptocurrency assets were deposited in Earn Accounts, they became the property of Celsius, and the remaining assets in the Earn Accounts became the property of the Debtors‘ bankruptcy estates.
At the time of the lawsuit, Celsius had around 600,000 accounts in its Earn program. Many account holders argued that they were entitled to their funds from the Earn Accounts and requested full returns. However, Judge Glenn determined that the funds belonged to Celsius. If the Judge had sided with the account holders, their recovery would have been tied to the distributions to unsecured creditors under a confirmed Chapter 11 plan.
Celsius has been granted an extension for submitting a Chapter 11 reorganization plan, and must submit a detailed plan by February 15, 2023 that discloses how it plans to maximize profit for all creditors and stakeholders. The bankruptcy case is still ongoing, and the outcome of the plan will be seen in the coming months.
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