A bankruptcy court read the terms and the coins were not yours

Inherited archive entry · retained from the earlier edition. Its factual, legal and policy claims have not all been reverified for 19 September 2026. Research scope.

What the court decided

On 4 January 2023, Chief Bankruptcy Judge Martin Glenn ruled on a central question in Celsius Network's Chapter 11 case: who owned the cryptocurrency sitting in customers' Earn accounts when Celsius filed for bankruptcy on 13 July 2022. The memorandum opinion records that roughly 600,000 accounts held Earn assets worth about $4.2 billion as of 10 July 2022. The court found that Celsius's Terms of Use, a 'clickwrap' contract accepted by essentially all account holders, unambiguously granted Celsius 'all right and title to such Eligible Digital Assets, including ownership rights' the moment a customer deposited coins into an Earn account. On that basis, the coins became property of Celsius's bankruptcy estate, not the depositors, when the case was filed. Case background, including the filing date and later plan confirmation, is recorded on the case administration site maintained by the claims agent.

Why the contract language, not the app balance, controlled

Customers who watched a number in the Celsius app naturally read it as their balance, in the ordinary sense of money that is theirs. The opinion quotes the Terms of Use directly: in exchange for a 'financing fee' called Rewards, a depositor granted Celsius the right to hold, pledge, sell, lend, or otherwise use the asset 'in Celsius' full discretion', warning explicitly that in the event of bankruptcy such assets 'may not be recoverable' beyond the depositor's rights as an ordinary creditor. Objecting account holders argued that the ubiquitous word 'loan' throughout the document implied they retained ownership; the court held the transfer-of-title clause could not be read out of the contract simply because 'loan' appeared elsewhere, noting that a loan of assets can itself include a transfer of title, as it does when securities are loaned to a broker.

The boundary of what the ruling settles

The opinion is explicit about its own limits: it does not decide ownership of assets in Celsius's separate Custody, Withhold, or Borrow programs, and it does not resolve individual account holders' contract-formation defences, fraud claims, or state securities-law objections, all of which the court reserved for the later claims process. Account holders left as unsecured creditors are not left with nothing, but their recovery depends on a confirmed plan and the pool of estate assets, not on the coin balance their app once showed.

Questions to carry forward

• Does a platform's terms of use describe deposits as a loan, a custody arrangement, or an outright transfer of title?
• What happens to a depositor's assets specifically if the platform enters bankruptcy, according to the contract's own text?
• Is an account balance shown in an app a legal claim, and if so, of what priority against other creditors?

Nothing in this ruling turns on where Celsius kept the coins or whether the platform behaved honestly; it turns on what depositors agreed to when they clicked accept, months or years before anyone expected to need to read it again.