US Court Dismisses Most Celsius Claims Against Chainalysis, But 'Aiding' Lawsuit Continues
A US federal judge has dismissed most claims against Chainalysis brought by Celsius Network’s litigation administrator, but allowed one aiding-and-abetting claim to continue. The court found that Chainalysis was aware of false statements in Celsius’ 2020 press release and helped distribute them. This legal proceeding is part of efforts to recover assets for creditors following Celsius’ bankruptcy amid the crypto market crash.
Court's Decision on Claims Against Chainalysis
US District Judge Margaret Garnett dismissed 12 claims against Chainalysis with prejudice, preventing amendments, but allowed the aiding-and-abetting claim to proceed. She ruled that the complaint adequately alleged that Chainalysis knew about the false statements in the 2020 Celsius press release and helped disseminate them.
Three consumer-protection claims were dismissed without prejudice, giving plaintiffs until October 20 to amend or withdraw them.
Background and Chainalysis’ Involvement
Celsius, a crypto lending platform, filed for bankruptcy in July 2022 after freezing withdrawals in June, leaving roughly $4.7 billion inaccessible to customers. The Blockchain Recovery Investment Consortium (BRIC) serves as litigation administrator and recovery manager on behalf of Celsius and some former customers, pursuing claims including against Chainalysis.
In 2020, Celsius used Chainalysis’ Reactor software to calculate assets under management and publicized the result as an audit. Initially, the asset amount was about $1.18 billion before methodological changes raised it to approximately $3.3 billion.
On December 9, 2020, Celsius issued a press release claiming an “audit” confirming about $3.3 billion in assets based on Chainalysis Reactor data covering transactions, deposits, and withdrawals since 2018. The complaint alleges Chainalysis helped draft, edit, and approve the release while knowing the terms “audit” and “independent verification” were false or materially misleading.
Positions and Current Case Status
Chainalysis declined to comment on the matter. Celsius’ litigation administrator had not responded before publication.
The lawsuit is part of broader steps to recover funds for creditors amid Celsius’ bankruptcy triggered by the cryptocurrency market downturn.
Why it matters
This court ruling sheds light on the complex legal battle surrounding Celsius’ bankruptcy, with Chainalysis accused of aiding the dissemination of false information regarding the platform’s financial health. Allowing the aiding-and-abetting claim to proceed opens the door for further investigation into third-party accountability in auditing and publicizing crypto firms’ data. It also underscores the critical importance of accuracy and transparency in reports provided to investors and creditors, especially amid the volatility of the cryptocurrency market.
Prepared from the source material with AI-assisted editing and checked against the supplied facts.
Open original source ↗