Withdrawals were halted and the company filed for bankruptcy. The court found that the terms of service transferred title of deposited assets to Celsius, making depositors unsecured creditors of the estate.
Custody is a legal arrangement before it is a technical one. Read what the terms do to legal title, because a yield rate is priced in the risk you did not read.
These are the custody configurations structurally exposed to this kind of event. It describes the failure class, not any individual holder.
Whether your own arrangement sits in one of those groups is the question our Custody Independence Standard is designed to answer, and the four questions in Is your custody setup actually safe? walk through it.
Chapter 11 filings, court rulings
Figures are as reported by the named sources. Proof of Custody has not independently reproduced the underlying analysis.
Proof of Custody, "Celsius" incident record, proofofcustody.io/incidents/celsius-2022Withdrawals were halted and the company filed for bankruptcy. The court found that the terms of service transferred title of deposited assets to Celsius, making depositors unsecured creditors of the estate. Reported loss: ~$4.7B owed to customers.
Custody is a legal arrangement before it is a technical one. Read what the terms do to legal title, because a yield rate is priced in the risk you did not read.
This class of failure could reach: bitcoin lent or earning yield. It describes the failure class rather than any individual holder.