A group of Celsius Network custody wallet customers is suing the bankrupt lending platform in an effort to reclaim more than $22.5 million worth of funds.
In a new lawsuit filed on Wednesday, individual holders of more than 64 accounts with Celsius say they retained the title to all of their crypto assets held in the firm’s custody wallets and therefore are entitled to their return.
The account holders argue that Celsius cannot use their funds to pay off bankruptcy debts.
“In April 2022, the debtors [Celsius] created a self-titled ‘custody service’ where users entrusted their cryptocurrency to the debtors in a ‘custody wallet’ but retained title to such assets…
On Thursday, Celsius filed a motion with the same bankruptcy court seeking authority to permit certain customers to withdraw their cryptocurrency from their custody program. A hearing on the motion is scheduled for October 6th.
Celsius Network initially filed for bankruptcy back in mid-July, just weeks after it halted all customer transactions and withdrawals, blaming extreme market volatility.
Since the bankruptcy, the centralized finance firm has also been slapped with a class action lawsuit alleging it operated as a Ponzi scheme.
Furthermore, California’s Department of Financial Protection and Innovation issued Celsius a desist and refrain order over claims that the company violated the local Corporation Code.
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/eliahinsomnia/Sensvector