The Celsius Network cryptocurrency lending platform has been at the center of controversy since its launch in 2018. The company is facing multiple lawsuits from investors who say they were misled about the nature of the initial coin offering (ICO), which was supposed to have generated $100 million but raised only $33 million instead. In addition to this, more than 50% of its users were non-U.S.-residents, meaning they were not eligible for any compensation under U.S. securities laws even though they were impacted by Celsius’ alleged misrepresentations as well as changes made to their crypto balances without notice or explanation during the period when their accounts were frozen by regulators. Now, according to figures provided by Celsius itself along with comments made by a federal judge overseeing the case.
Celsius In Big Trouble
According to figures provided by Celsius to U.S. District Judge Valerie Caproni, a total of 108,817 claims have been submitted so far. Of these, more than 60 percent have been deemed duplicates and are being rejected. The number of duplicate claims is expected to grow as more people discover that they may be eligible for compensation.
Celsius has also said that it has received more than 13 million pages worth of documents from law firms representing claimants seeking compensation for losses allegedly incurred due to the breach at Bitfinex and Tether Limited (USDT) in 2018.
People have made valid claims so far, although more than 14% of these claims are duplicates. That means that approximately one in seven claimants has filed a claim twice or more. These duplicate claims represent an average value of $25,000 (the majority of which are for less than $50,000).
The Celsius Network case is not over yet, but it has already made a significant impact on the crypto industry. The U.S. District Court for the Southern District of New York has provided some much-needed clarity around how securities laws apply to cryptocurrencies and token sales, leading to an increase in cryptocurrency offerings that are registered with state authorities or exempt from registration requirements altogether. In addition, the ruling in this case may embolden regulators across Europe and Asia who have been debating whether or not they should follow suit when it comes to regulating cryptocurrencies as financial instruments that could be considered securities under existing legal frameworks
