Following its insolvency in June, the crypto lending company Celsius chose to freeze its customers’ funds. The latter are now multiplying legal procedures to obtain the right to recover their funds. Some of them have just hired Troutman Pepper to plead their case in court.
$14.5 million frozen by Celsius in retainer accounts
Due to cease and desist orders from regulators in some US states, Celsius has not been able to offer deposit accounts to all of its customers. To satisfy the latter, the crypto lending company came up with the idea of creating retainer accounts. However, the funds transferred to these accounts, $14.5 million, have been frozen there since the company formalized its insolvency. The affected clients took the decision to force Celsius to unfreeze these accounts by hiring Deborah Kovsky-Apap, partner at Troutman Pepper.
« We believe that the assets held in the withholding accounts are not the property of the mass. They’re just not part of the Celsius ecosystem – it’s more like depositors left their wallet at the bar and the bartender kept it until they came back for it. We believe that the withholding accounts should be unfrozen as soon as possible so that depositors can recover their property “, she said. A long standoff is therefore coming between the loan company and this category of customers.
The funds placed in the withholding accounts are not intended for offers of investment returns, so their owners demand their immediate return. Meanwhile, new details are emerging about the mismanagement shown by the company’s CEO. In particular, the latter tried a poker trick by selling his clients’ BTC to buy them back at a discount in order to cover the losses of Celsius.
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