The cryptocurrency lending platform, Celsius Networkhas filed a lawsuit alleging that the custodian, Prime Trust, failed to deliver some $17 million in cryptocurrency.
In a Tuesday filing with the United States Bankruptcy Court for the Southern District of New York, Celsius’s legal team filed a complaint against Prime Trust, alleging that the company failed to return $17 million in crypto assets in June 2021 when it ended its relationship with the lending firm. According to Celsius, Prime Trust acted as a cryptocurrency custodian for users based in New York and Washington from 2020 to mid-2021, returning $119 million in digital assets after the end of the trade deal, but retaining some of the funds: 398 Bitcoin (BTC), 3,740 Ether (ETH), 2,261,448 USD Coin (USDC), and 196,268 Celsius (CEL).
“At the commencement of these bankruptcy proceedings, Prime Trust was required under the Bankruptcy Code to deliver all assets belonging to Celsius that are in Prime Trust’s possession to Celsius, including these remaining crypto assets, and should be ordered to deliver them now as soon as possible. pursuant to section 542 of the Bankruptcy Code,” the filing said. “Alternatively, Celsius seeks specific compliance with certain contractual provisions that obligate Prime Trust to deliver and transfer the crypto assets to Celsius.”
The legal team added:
“Celsius tried for many months to persuade Prime Trust to meet its obligations and transfer the identified Subjective Ownership to Celsius. At times, it seemed that those efforts were close to being rewarded. However, to this day, Prime Trust continues to improperly retain the Subjective Ownership that Celsius has directed Prime Trust to release.”
In July, Celsius filed for Chapter 11 bankruptcy after paying off debts to Compound, Aave and Maker. Cointelegraph reported on Aug. 16 that the crypto lending platform was on track to run out of money by mid-October, with a report suggesting that the company’s debt was closer to $2.8 billion versus claims in its bankruptcy filing that showed a $1.2 billion deficit.
At press time, the combined value of BTC, ETH, USDC, and CEL tokens that Celsius claimed from Prime Trust was approximately $17.4 million. Cointelegraph reported on Aug. 13 that despite bankruptcy proceedings, the price of Celsius’s CEL token had risen more than 4,000% since June, hitting a three-month high of $3.86. However, the price is down more than 50% from that peak, hitting $1.67 on Tuesday.
Cointelegraph reached out to Prime Trust but did not receive a response at the time of publication of this story.
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