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Celsius Network Wins Ownership Rights to Customer Crypto Deposits [A bankruptcy judge rules firm can use $4.2 billion in cryptocurrency deposited with high-interest accounts as it sees fit]
wsj ^ | 1/4/22 | Soma Biswas

Posted on 01/05/2023 4:18:51 AM PST by catnipman

A bankruptcy judge ruled that digital coins deposited in Celsius Network LLC’s interest-bearing accounts belong to the firm, ruling against thousands of customers and deciding a key legal issue in crypto-related insolvencies.

(Excerpt) Read more at wsj.com ...


TOPICS: Business/Economy; Crime/Corruption; Culture/Society; News/Current Events
KEYWORDS: bankruptcy; chiefjudge; chiefstooge; crypto; martinglenn; sdnewyork
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To: catnipman
Any investment that can’t be easily understood should be avoided like the plague. So many people poured money into something that was just a “black box” to them, the workings of which they couldn’t even begin to understand. That’s a scammer’s dream.

The bottom line with crypto is that it has zero intrinsic value. The only reason it skyrocketed for a while was because of the irrational herd mentality causing millions of people to keep investing in it because it was “going to the moon.” It was a classic bubble based upon nothing.

The only way that it might at some point have actual value is if one of the hundreds of crypto companies out there (most likely Bitcoin or Ethereum) becomes widely accepted as an alternative payment medium. It’s not enough for these vapor “coins” to be considered alternative stores of value, they have to be able to go to the next level by becoming as universally accepted for payment as are official currencies. Only then will these things have any real value.

21 posted on 01/05/2023 5:43:49 AM PST by noiseman (The only thing necessary for the triumph of evil is for good men to do nothing.)
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To: Roccus
the block chain indelibly records transactions, but thats not the issue here. The problem is that the users of this platform gave their crypto (however temporarily) to the platform, to draw interest or whatever.

if you dont hold it, you dont own it.
22 posted on 01/05/2023 5:57:42 AM PST by wafflehouse ("there was a third possibility that we hadn't even counted upon" -Alice's Restaurant Massacree)
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To: Candor7

you have no idea what you are talking about, but i dont suppose that will stop you


23 posted on 01/05/2023 5:58:36 AM PST by wafflehouse ("there was a third possibility that we hadn't even counted upon" -Alice's Restaurant Massacree)
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To: SeeSharp

So they get the deposits AND the interest?


24 posted on 01/05/2023 6:09:11 AM PST by scrabblehack
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To: wafflehouse; BobL

So iow, this really has little to do with crypto.
It’s just like investing in AIG before the crash only instead of using cash as was the case then, crypto was the exchange medium here...right?


25 posted on 01/05/2023 6:10:08 AM PST by Roccus (First we beat the Nazis........then we defeated the Soviets....... Now, we are them.)
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To: wafflehouse

Fungible....a critical feature of currency does not exist in Crypto Currency.

YOu might as well pi$$ your wealth over the rail of a high bridge and watch it on the long fall to disappear forever into oblivion.

Do you not like the word fungible?

Why has it disappeared from your woke dictionary? HAas it been replaced by gender neutral pronouns or some other piss mire wokeness?

BUahahahahahahahaha!


26 posted on 01/05/2023 6:12:40 AM PST by Candor7
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To: systemjim

Re: 4 - Yes, but the problems started long before this.

People invested in a loosely regulated market and got burned badly. That’s on the investor for not doing due diligence.


27 posted on 01/05/2023 6:13:13 AM PST by Fury
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To: Roccus

“It’s just like investing in AIG before the crash only instead of using cash as was the case then, crypto was the exchange medium here...right?”

Yep, from what I’ve seen that is the difference. Once you let go of your money, or crypto, you put it at risk - the only question is how much risk. Crypto seems to be a lot like gold, if you hold it yourself (in a ‘crypto wallet’), no one can take it from you, but it can lose value due to speculation. Beyond that, if you do hold on to crypto, just like gold, you won’t see a dime in interest income. But if you let go of the crypto...then you might interest income, at least until you find out that your exchange was crooked.

But Sam Bankman Fraud was into Extreme Altruism (or whatever he called it) and wore shorts to interviews, so he was never going to put his investor money at risk in his exchange, so no need for insurance. LOL!


28 posted on 01/05/2023 6:22:26 AM PST by BobL
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To: catnipman

crypto is just another form of wealth representation.

swap ‘crypto’ with ‘dollars’ or ‘shares’ and you quickly see how this is not Constitutionally valid.


29 posted on 01/05/2023 6:49:25 AM PST by sten (fighting tyranny never goes out of style)
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To: Roccus

if you want to trade between the various cryptos, which people do just like the markets, you put your crypto ‘on account’ with the broker... just like the markets. the broker is then able to buy/sell on your behalf.

if a judge decided a stock broker was bankrupt and all the stocks on account can be confiscated as assets of the company, thereby stealing them from the account owners, people would lose it... and that ruling would quickly be deemed unConstitutional


30 posted on 01/05/2023 6:52:31 AM PST by sten (fighting tyranny never goes out of style)
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To: scrabblehack
So they get the deposits AND the interest?

Good question. I would guess the depositors could file a claim for the interest with the bankruptcy court just like any other creditor. Then again, interest already credited becomes principle if you don't withdraw it, so maybe not.

31 posted on 01/05/2023 7:51:01 AM PST by SeeSharp
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To: noiseman
The bottom line with crypto is that it has zero intrinsic value.

That's not the problem with crypto. In economic terms, nothing has intrinsic value. Value is purely subjective. It exists only in the minds of individuals.

The only way that it might at some point have actual value is if one of the hundreds of crypto companies out there (most likely Bitcoin or Ethereum) becomes widely accepted as an alternative payment medium.

Here you're on the right track. What's missing for each of the crypto "currencies" is a price system. You can spend bitcoin, but only by converting the value of it into another currency, like the dollar. Nobody puts bitcoin prices on anything.

See Mises Regression Theorem

32 posted on 01/05/2023 8:11:28 AM PST by SeeSharp
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To: Pontiac

“My question is “If they still have $4.2 billion in deposits, why are they bankrupt?””

lots of reasons ...

1. they probably don’t HAVE the $4.2 billion; that’s probably just the amounts “deposited” by the suckers ... most likely that’s mostly been gambled away ...

2. When Celsius gambled it away, they did so with margin, that is, they borrowed and promised to pay back ADDITIONAL big chunks of money, but with promissory agreements giving their debtors priority rights for repayment, whereas retail “customers” signed agreements (usually unknowingly) saying it was quite OK if all their crypto went poof and they wouldn’t get anything back ...

3. Finally, even though there are SOME assets remaining, the debts owed are much greater, and payoff will be based on the priority terms written into any repayment agreements ....


33 posted on 01/05/2023 8:25:43 AM PST by catnipman (In a post-covid world, ALL "science" is now political science: stolen elections have consequences)
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To: Candor7

“You would do better gambling in Las Vegas.”

AND probably have more fun!


34 posted on 01/05/2023 8:26:17 AM PST by catnipman (In a post-covid world, ALL "science" is now political science: stolen elections have consequences)
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To: AZJeep

“Kind of like your savings account belonging to the bank?”

that’s actually correct, but the difference between banks and crypto exchanges is that if an FDIC insured bank goes broke and/or steals your money, you’ll get it back anyway (up to the FDIC max) because it’s insured by FDIC ... PLUS, FDIC banks operate under stringent Federal regulation and are regularly audited by the Feds, so the chances of theft and/or failure are very small to start with ...

also, FDIC banks segregate customer deposits into separate accounts, whereas crypto exchanges co-mingle ALL of their “deposits” into one or two gigantic “wallets”t that THEY own ...


35 posted on 01/05/2023 8:31:10 AM PST by catnipman (In a post-covid world, ALL "science" is now political science: stolen elections have consequences)
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To: Chickensoup

“30% Baby!”

indeed ... but regardless of the number, ANY claim to pay ANY amount of “interest” on crypto is fraudulent on the surface because crypto is a virtual entity without inherent value AND inherently offers no yield ... any “interest” exchanges may claim to pay boils down to them gambling in one fashion or another that crypto prices will go up up up ... so when crypto prices go down down down like they did in 2022, these outfits lose their bets and go tits up and customer “deposits” go poof ...


36 posted on 01/05/2023 8:35:53 AM PST by catnipman (In a post-covid world, ALL "science" is now political science: stolen elections have consequences)
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To: Scrambler Bob

“Yeah, but you forgot about the fine print on the mattress tag.”

indeed ... i imagine i’ve incurred several lifetimes of sentences in Federal lockups (just don’t tell anyone) ...


37 posted on 01/05/2023 8:37:24 AM PST by catnipman (In a post-covid world, ALL "science" is now political science: stolen elections have consequences)
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To: catnipman

First tag I read was when hiding behind the couch and I was about 8 years old. I fully comprehended it.

UNDER PENALTY OF LAW DO NOT REMOVE THIS TAG

You can tell that stuck with me to this very day.


38 posted on 01/05/2023 8:42:21 AM PST by Scrambler Bob
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To: noiseman

“The only reason it skyrocketed for a while was because of the irrational herd mentality causing millions of people to keep investing in it because it was “going to the moon.” It was a classic bubble based upon nothing.”

very true, but there’s one more piece to that story, namely that massive wash-trading is what initially sparked the fear of missing out by fraudulently pumping the price of cryptos and indicating that lots and lots of people were buying lots and lots of crypto ... even today, analysis of trading shows that over 50% of trading is STILL wash-trading ...

there’s a reason that wash-trading in traditional securities is flat out illegal ...


39 posted on 01/05/2023 8:44:43 AM PST by catnipman (In a post-covid world, ALL "science" is now political science: stolen elections have consequences)
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To: Roccus

“block-chain (something I never understood)”

Think of block chain as an accounting ledger.

Of course if the thieves run off with the ledger and the loot you are out of luck—in 1923 or 2023!


40 posted on 01/05/2023 8:47:51 AM PST by cgbg (Claiming that laws and regs that limit “hate speech” stop freedom of speech is “hate speech”.)
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