Celsius creditors feeling the heat over preference claims

The Hong Kong High Court has found that cryptocurrencies are property in a landmark case, further boosting the city’s virtual asset industry and its ambition to become the Asian crypto hub.

The law can be slow to adapt to emerging technologies such as cryptocurrency. However, with a thorough knowledge of existing legal avenues, adaptation is not always necessary. Macpherson Kelley recently acted in a case that demonstrates how trustees in bankruptcy can use existing tools at their disposal to investigate, and ultimately recover, cryptocurrency held by bankrupts.

Identifying and locating cryptocurrency

If a trustee becomes aware that a bankrupt has owned or traded in cryptocurrency assets, the trustee will normally:

On January 4, 2023, Judge Glenn of the United States Bankruptcy Court for the Southern District of New York issued a much-awaited decision in the Celsius Network LLC (along with its affiliated debtors, “Celsius” or the “Debtors”) chapter 11 cases relating to the ownership of crypto assets deposited by customers in the Celsius “Earn” rewards program accounts.