Celsius Network Files Lawsuit Against Prime Trust

A lawsuit has recently been filed by the Celsius Network against Prime Trust, with the crypto lender accusing the custodian of not turning over cryptocurrency worth roughly $17 million.

Prime Trust

The legal team of the crypto lending platform filed a lawsuit on Tuesday in a US Bankruptcy Court located in the Southern District of New York.

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It was a complaint against custodian Prime Trust in which Celsius alleged that it had not returned about $17 million of the company’s crypto assets when they terminated their relationship in June 2021.

Celsius Network claimed that it had used Prime Trust’s custodian services for its users based in Washington and New York from 2020 to halfway through 2021.

The crypto lender said that Prime Trust had returned funds of about $119 million in crypto assets after their business arrangement had come to an end.

However, Celsius Network claimed that the custodian had held back some of the funds, which included 3,740 Ether (ETH), 398 Bitcoin (BTC), 196,268 Celsius (CEL), and 2,261,448 USD Coin (USDC).

The filing

Celsius said in the filing that once it had begun bankruptcy proceedings, Prime Trust was under obligation in accordance with the Bankruptcy Code to return all property belongings.

The crypto lender said that the custodian should have returned all the crypto assets that were still in their possession and Prime Trust should be ordered to return them now in accordance with section 562 of the Bankruptcy Code.

The legal team also asserted that they had also tried for months to convince Prime Trust to fulfill its obligations and transfer its assets to the company.

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There were times that it seemed that the efforts would be rewarded, but the legal team said that to this day, Prime Trust is wrongfully withholding its property that is in their possession.

Celsius’ issues

Celsius filed for Chapter 11 bankruptcy on July 11th after it closed the debts it owed to Aave (AAVE), Compound (COMP), and Maker (MKR).

On August 16th, reports had indicated that the crypto lender was fast running out of money and it would happen sometime in October.

A report also indicated that the debt of Celsius Network was close to $2.8 billion, even though it claimed in its bankruptcy filing that its debt was around $1.2 billion.

The combined value of the tokens that Celsius Network has claimed was in possession of Prime Trust is $17.4 million at the time of writing.

On August 13th, it had been reported that even though Celsius had filed for bankruptcy, its CEL token had seen its price rise by almost 4,000% since June.

As a matter of fact, the token reached a high of three months at $3.86. But, there has been a 50% drop in the token’s price since it reached that peak. On Tuesday, the price was around $1.67.

In other news, Celsius has also filed a lawsuit against KeyFi and its founder for mismanaging its crypto investments which resulted in losses.