In re Celsius Network LLC

Celsius Network LLC (Celsius) (debtor) was a cryptocurrency lending and borrowing platform. People could create accounts with Celsius by signing up online. Account holders (creditors) could deposit cryptocurrency assets into their Celsius accounts, where the assets could earn interest or be used as security for loans. During the sign-up process, a user was required to click a button agreeing to the platform’s “Terms of Use” before proceeding to the next page and obtaining an account. A user did not have to view or read these terms before clicking to indicate agreement. However, if a user chose to view the terms of use, the terms stated that if an account holder deposited any cryptocurrency asset into a Celsius account, all ownership rights in that asset transferred to Celsius and the account holder would not be able to exercise any ownership rights over the asset. The terms also stated that if Celsius declared bankruptcy, an account holder might not be able to recover a deposited asset and might be limited to recovery as an ordinary creditor. In 2022, Celsius declared bankruptcy. At that point, account holders had deposited $4.2 billion of cryptocurrency assets into Celsius accounts. Multiple motions were filed with the bankruptcy court, turning on whether Celsius or the account holders owned those deposited assets. The bankruptcy court considered this ownership issue.