A presiding judge who was responsible for controlling the bankruptcy liquidation procedure of Celsius Network, a data encryption credit company, rejected three customer applications. Since July, they have given different requirements for frozen assets.

In the order submitted to the Foreign Bankruptcy Court of the Southern District of New York City on January 25, Judge George Glenn ruled against the motion of the claimant Rebecca Gallagher. Gallagher fabricated a lie that his "profitable" assets in the platform were "her property, not the property of bankruptcy" manipulated by the borrower. The presiding judge denied the similar motion of the Celsius account holders Mark Benzaken and Kulpriet Khanuja.

The motion of these three persons included the claim that the terms of use of Celsius could not transfer its assets from the service platform to the debtor's manipulation in the event of bankruptcy. Gallagher and Khanuja both named Alex Mashinsky, claiming that the former Celsius CEO misled the customer according to the announcement and said that the customer would keep all ownership of its assets separately.

Chief Justice Glenn said that the People's Court "looked at the charges against MasinLeoni with heart", but denied all three motions. In Khanuja's case, he said:

"Celsius's breach of its contract with Khanuja will not endanger the ownership of the cryptocurrency stored in Khanuja's account. As explained in the Income Opinion, the cryptocurrency stored in the profit account becomes the property of Celsius [...] The cryptocurrency on Khanuja's profit account was and is all property."

Louise Abbott, a partner of Keystone Law, the company's headquarters in the United Kingdom, told Cointraft in December that one of the legal and regulatory countermeasures available to FTX customers - the trading center is also facing bankruptcy liquidation procedures abroad - is undoubtedly claiming that his data encryption and legal assets "are their property from beginning to end" and cannot be under the control of the borrower's property. Although Abbott refers to the FTX stock fund donated to a third party, the recent ruling in the Celsius case indicates that its terms of use grant the service platform "all rights and ownership of such data assets, including ownership".

Celsius reported the liquidity problem in June 2022 and blocked customers from withdrawing cash for the reason of "extreme sales market standards". The company later declared bankruptcy in July. U. The foreign government filed a lawsuit against Marcine Leoni, accusing her of playing a role in the downfall of the website because she was suspected of providing "false and misleading statements" to investors and concealing the "terrorist operation" of the company.