A US judge recently said that most of the customer deposits on the Celsius Network belong to the platform. In order words, as the bankruptcy proceedings continue, Celsius Network customers will be the last ones to get paid. This shows how crooked the terms and conditions of the lending platform were and how the company toyed with its customers.
Celsius Network customers are getting the least priority
There were about 600,000 customers involved with Celsius Network, with assets worth more than $4.2 billion, when the lending platform declared bankruptcy in July 2022. US Judge Martin Glenn, who is handling the bankruptcy proceedings of Celsius Network, said that the company doesn’t have enough funds to give back all the customer’s deposits.
The first priority while giving back funds to investors would be securing creditors and customers with non-interest-bearing accounts. However, there is no clear information on the amount or fraction of the company’s secured and unsecured debt.
The ruling by the US Judge also ensures that there isn’t a situation where some of the customers are paid full amounts of investments, and on the contrary, most are not!
Earlier the judge also said that only a small customer base of the company is actually entitled to get back their funds in the bankruptcy case. However, violation of state laws means customers have a chance to make a case against Celsius.
The biggest problem
Celsius Network’s bankruptcy proceedings show why it is important to read the terms and conditions before agreeing to them. They said that the customer who deposits funds into interest-bearing accounts are literally handing over the ownership of those funds to Celsius Network. So, just by using the platform your funds are not yours anymore. Therefore, these customers will be the last to get paid.
However, due to the lack of transparency of Celsius’ terms and conditions, about Twelve US States and the District of Columbia objected to their bid to claim control over customer assets. Many US states also say that their conditions violate regulations, and hence they won’t be able to rely on them.
What are your thoughts as US Judge says Celsius Network customers will be the last to get paid? And do you think the company’s terms and conditions make any sense? Let us know in the comments below. And, if you found our content informative, share it with your family and friends.
Also Read: US authorities seize FTX’s Robinhood shares worth $460M.
