The lack of regulation of cryptocurrencies in the United States has long complicated the lives of users and service providers, and now a judge has acknowledged the pain that the judiciary also feels for its absence. Chief US Bankruptcy Judge Martin Glenn, the judge presiding over the Celsius case, said the court will seek guidance abroad in dealing with the situation.
Glenn wrote in an October 17 filing in the Celsius case:
“Many, or perceivably most, cases involving cryptocurrencies may raise legal issues for which there is no controlling legal precedent in this Circuit or elsewhere in the United States or in other countries in which the cases are raised.” .
However, the court could consider the 529-page document “Digital Assets: Consultation Paper” published by the Law Commission of England and Wales in the Celsius case in the future, since the document addresses “many legal issues that arise in cases involving digital assets.”
Judge Glenn, who oversees #Celsiusbankruptcyfiled a letter saying because there is often no legal precedence for crypto in the US, the court may refer to the UK’s “Digital Assets Consultation Paper” for guidance.
Letter: https://t.co/jqcGfWFYhg
Paper: https://t.co/1n380Rh0u8 pic.twitter.com/WhkO8p4Id7— Amy Castor (@ahcastor) October 17, 2022
The judge noted: “The legal principles that are applicable in the UK are not binding on US courts,” but he said those principles “may be persuasive in addressing legal issues that may arise in this case.”
The document was published on July 28 and is not legally binding in the UK. It contains provisional proposals for legal reform and is open to comments until November 4. He suggests considering crypto assets as a new “category of personal property.”
Crypto lending platform Celsius filed for bankruptcy protection on July 13, after freezing withdrawals on June 13. Due to the complexity of the case, the US trustee handling the case has called for an independent examiner to “untangle” Celsius’ finances and business operations and assess allegations of incompetence and mismanagement against the company.
The boss of FTX, Sam Bankman-Fried, who earned the nickname “banker of last resort” during the recent cryptocurrency market crash, promised to “take a look” at Celsius, but has taken no further action.
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