The beat goes on, seems as though the trust factor continues to flow out of the centralized digital asset custody arena, whether it is lending or an exchange. A U.S. bankruptcy judge laid down the gauntlet by ruling that failed crypto lender Celsius Network actually owns the digital assets that belong to their customers. This is a scary proposition for any crypto holder who is looking to leverage their crypto to generate revenue, place it in a centralized environment at your own peril is what this is stating.
The ruling is giving Celsius the runway to sell off approximately $18MM worth of stablecoins owned by their customers.
According to reports Celsius held approximately $4B plus worth of digital assets, that is huge, this will impact well over 500k customers, so the little guy will be sitting at the back of the line and probably receive pennies on the dollar if they are lucky it seems.
This brings up the bigger question, how will the other bankruptcies in the crypto space be seen, does this set the stage for investors to be pushed to the back of the line across the board, whether it is FTX, Voyager Digital, BlockFi or others yet to hit.
This brings up a solid use case for self custody, holding and controlling your own digital assets if the only protection that can be had until things are in place that traditional finance has, such as SIPC or FDIC. This story will continue to unravel in the courts as the next and probably only step for investors who held their assets at Celsius will be to sue for breach of contract or fraud, whatever works in their specific state.
– UCW Newswire