The Ruling

A judge has ruled that the deposits in a cryptocurrency lending platform's yield-bearing accounts belong to the company, rather than the individual account holders. The decision was made in the case of a platform called Celsius, which had 600,000 accounts and around $4.2 billion in deposits, including stablecoins worth approximately $20 million, when it filed for Chapter 11 bankruptcy. The judge found that the terms of use for the accounts were "unambiguous" in transferring ownership of the digital assets to the company. In a separate development, the New York attorney general has accused the founder of Celsius of defrauding investors out of billions of dollars through false and misleading promises.

The latest ruling in the Celsius bankruptcy case has implications for investors using similar products on other platforms, many of which have filed for bankruptcy in recent months. The ruling serves as a reminder of the importance of the phrase "Not your keys, not your crypto," which refers to the idea that investors cannot be certain that their cryptocurrency holdings are secure unless they are stored in a wallet that they control. In the case of Celsius and other platforms that control the wallets of their customers, the funds belong to the platform, meaning that customers may lose all of their money.