Law Decoded, Aug. 29–Sept. 5: Celsius is willing to give back some money, but not much

Crypto lending platform ready to return $50 million on $210.

US-based crypto lending platform Celsius, which collapsed and halted the withdrawal option amid the June market meltdown, has pledged to partially repay the money to customers. However, there is a catch - as the company has filed a petition in the United States Bankruptcy Court, its undertaking would only apply to custodial and holdback accounts and custodial assets worth $7,575 or less.

Community response to the motion has been mixed, with some creditors happy to recover at least some of the frozen funds, while some industry executives have criticized the platform's management. BnkToTheFuture.com CEO Simon Dixon drew attention to the fact that the possible $50 million release wouldn't be all that impressive, given the $210 million in assets Celsius still has in custody. According to the company's filing, however, the motion is only a "first step, not the final word, in efforts to return assets to customers."

The benevolence of this approach could also be called into question in light of a complaint filed the day before with the United States Bankruptcy Court for the Southern District of New York by an ad hoc group of 64 account holders. . Creditors are seeking to recover more than $22.5 million in cryptocurrency assets collectively held in Celsius' custody and noted that Celsius' previous refusal to honor any withdrawal contradicts the "clear language of the terms use of debtors". The company has a $1.2 billion deficit on its balance sheet, with most of the liabilities owed to its users. Celsius filed for Chapter 11 bankruptcy protection in mid-July.

California State Assembly lawmakers have passed the Digital Financial Assets Act, which will require digital asset exchanges and crypto companies to obtain a business license issued by the Department of Financial and Innovation Protection from the State of California. Once...