Ripple’s XRP and Celsius’ Institutional Saga
In a recent court hearing, it was revealed that the landmark judgment regarding the status of Ripple’s XRP token as a security is not expected to impact Celsius’ ongoing bankruptcy proceedings. While the judge ruled that XRP itself is not a security, they found that Ripple Labs’ sales of XRP to institutional clients were unauthorized security offerings. This ruling has drawn attention to the potential connection between Celsius’ bankruptcy proceedings and XRP’s illegal sales.
The Potential Impact on Celsius’ Creditors
The recent ruling on XRP could potentially influence the repayment to creditors of Celsius’ token CEL. U.S. bankruptcy regulations require a compulsory downgrade of customer claims related to securities. However, Chris Koenig, who is representing Celsius, expressed his belief that the Ripple judgment may not have a significant impact beyond the CEL token. He also mentioned that the new company taking over Celsius’ assets has not been involved in any securities offerings or adopted Celsius’ past practices.
Legal Storm Brews for Celsius Leadership
Celsius’ founder and ex-CEO, Alex Mashinsky, along with Chief Revenue Officer Roni Cohen-Pavon, are facing fraud charges brought forward by the Department of Justice and various regulatory bodies. Simultaneously, Celsius has made agreements with regulators to prevent disruption to creditor payouts. The arrangement with the Securities and Exchange Commission supports the assertion that both CEL and Celsius’ Earn Interest Account qualify as securities.
Closing Thoughts
While the recent ruling on XRP’s status as a security may have implications for Celsius’ bankruptcy proceedings, it remains to be seen how significant the impact will be. The new company taking over Celsius’ assets aims to focus on less legally complex matters, such as bitcoin mining and Ethereum staking. Celsius’ leadership is currently facing legal challenges, and their agreements with regulators will play a role in determining the classification of CEL and Celsius’ Earn Interest Account.
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