Bankruptcy judge rules that Earn account assets belong to Celsius

axios.com

18 points·sakopov··4 comments

From a comment I made before this ruling but which is now decisively confirmed:

The thing is, "not your keys, not your coins" is not just true technically, but true legally. If Coinbase were to become insolvent and decide to use your coins to repay their creditors, you might say, "Hey, you can't do that, that's my money!", and they would-- correctly-- respond, "No, it isn't. Read that user agreement again." They really are not your coins.

Daylight robbery being made legal. So they don't have any liabilities in their books.

This is getting it backwards. "When a bank or other institution holding money on your behalf fails, your money is gone" is and always has been the default expectation throughout history. Deposit insurance specifically overrides that, but since it doesn't exist for crypto institutions, you are back to the default position. This really shouldn't be coming as a surprise.

I am not a lawyer, but I don't think this necessarily confirms that as a legal decision. This is the case for assets that were in a lending program and had a terms and conditions which gave all rights to Celsius. I think any reasonable interpretation of the law would see that as a different scenario vs a company providing custody services.

Comparing to the Coinbase user agreement[1]: "2.7.1. Ownership. Title to Supported Digital Assets shall at all times remain with you and shall not transfer to Coinbase. All interests in Digital Assets we hold for Digital Asset Wallets are held for customers, are not property of Coinbase, and are not subject to claims of Coinbase’s creditors. " [1]https://www.coinbase.com/legal/user_agreement/united_states#...

Reply on news.ycombinator.com