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1. GeniusMusing (geniusmusing@nu.federati.net)'s status on Saturday, 07-Jan-2023 15:07:14 EST GeniusMusing
   This is going to sting...
   
   Bad News for 500M Crypto Investors: They Don't Own Their Accounts Slashdot
   https://nu.federati.net/url/289256
   
   >"More than half a million people who deposited money with collapsed crypto lender Celsius Network have been dealt a major blow to their hopes of recovering their funds," reports the Washington Post, "with the judge in the company's bankruptcy case ruling that the money belongs to Celsius and not to the depositors."
   >The judge, Martin Glenn, found that Celsius's terms of use — the lengthy contracts that many websites publish but few consumers read — meant "the cryptocurrency assets became Celsius's property."
   >
   >The ruling underscores the Wild West nature of the unregulated crypto industry. On Thursday, New York Attorney General Letitia James moved to impose a kind of order, or at least legal repercussions, on Celsius founder Alex Mashinsky, whom she accused in a lawsuit of defrauding hundreds of thousands of consumers.... And while Glenn's ruling won't affect FTX, whose terms of use were different, some analysts saw the ruling as spreading beyond Celsius.
   >
   >"There are many other platforms that feature terms of use that are similar to Celsius's," said Aaron Kaplan, a lawyer with the financial-focused firm of Gusrae Kaplan Nusbaum and co-founder of his own crypto company. Customers need to "understand the risks that they are taking when depositing their assets onto insufficiently regulated platforms," he said.
   1. lnxw48a1 (lnxw48a1@nu.federati.net)'s status on Saturday, 07-Jan-2023 15:31:53 EST lnxw48a1

      in reply to
      @geniusmusing Actually, regulation has little to do with it. They became unsecured creditors, just like they would in a similar business that didn't involve cryptocurrency.
      
      Besides the ToS, there's also the "not your keys, not your crypto" aspect. There are "M of N" wallets, where moving funds would require a certain number of depositors to sign off. Celsius didn't do that, so they intentionally sought to act more like a bank.
      
      The worst part of all is that the move to steal the deposits is meant to extend the company's life one month longer. They'll still run out of funds and have to convert from Chapter 11 to Chapter 7, because they have not come up with a way forward that keeps them operating, and after this move, anyone who has deposited with them will quickly move whatever is left away, while no other depositors will come to them.