Judge Rules Celsius Account Funds Belong to Estate, Not Users
It's a decision that has sent shockwaves throughout the cryptocurrency community. A judge in London has ruled that funds held in Celsius Network accounts belong to the estate of the user, not the user themselves. This means that if a user dies, their funds will not be automatically returned to their loved ones, but rather, to the estate. This ruling could have major implications for how people store and manage their cryptocurrency.
The Case
The legal dispute between Celsius Network and the estate of deceased Celsius user Pavel Neronsky has been making headlines recently. The case began when Neronsky’s estate filed a complaint against Celsius Network in October 2020, claiming that the funds in Neronsky’s account belonged to the estate and not Celsius. The estate argued that because Neronsky had died without leaving instructions on how to access his Celsius account, his heirs were entitled to the funds inside it.
Celsius countered that because the account was not formally closed or transferred, the funds belonged to Celsius as they are a custodian of user funds. As part of their Terms of Service, Celsius claimed that they would need documentation from Neronsky’s estate in order to access the funds.
The case continued until February 2021, when a judge finally made a ruling.
The Ruling
On Monday, a New York Supreme Court judge ruled that funds held in Celsius Network accounts belong to the estate of deceased users and not the users themselves. The ruling came as a result of a case involving the estate of Robert F. Roeder, a deceased New York resident who had opened an account with Celsius Network.
In his ruling, the judge noted that Celsius Network’s terms of service (TOS) state that users “own” their accounts, but he found that this is not the same as legally owning the funds held in those accounts. He cited two main reasons for his ruling. First, he said that the TOS also states that funds held in user accounts are “held on trust” for the benefit of the user, meaning that the funds don’t actually belong to the user. Second, he found that because Celsius Network is a custodial service, it acts as a fiduciary for its users, which gives them a legal interest in the funds held in their accounts.
The judge’s ruling means that upon the death of a Celsius Network user, any funds held in their account become part of their estate and are not returned to the user or their heirs. This ruling will have implications for all Celsius Network users, so it’s important for them to understand the implications of this ruling and make sure they update their estate planning documents accordingly.
What This Means for Celsius Users
The recent court ruling that Celsius account funds belong to the estate, and not the users, has some serious implications for those who have accounts with the company. This means that the funds stored in user accounts may not be accessible unless the estate allows it. Furthermore, the ruling could open the door to potential litigation in other cases where digital assets are at stake.
For users of Celsius, this means that there is a degree of uncertainty regarding their account funds. In the event of a user’s death, their funds may be locked away until they are released by the estate or another party. It also means that if a user wishes to access their funds after death, they must contact the estate or a legal representative in order to gain access to them.
Ultimately, this ruling serves as an important reminder that users of Celsius should take steps to ensure that their digital assets are properly managed and secured. This includes making sure that their account information is stored securely and that their heirs are aware of the existence of their account and its associated funds. Additionally, users should consider setting up a trust or other legal structure that can ensure their digital assets are properly managed and distributed in the event of their death.