BREAKING: Bankruptcy Judge Refuses to Determine CEL Token’s Security Classification
A bankruptcy judge has declined to classify CEL, the native token of Celsius, as a security. The judge, Martin Glenn, cited the ongoing legal battle between Ripple Labs and the SEC as the reason for his decision. One major CEL token holder, Otis Davis, had requested a separate committee for CEL token holders based on the legal precedent set in the Ripple/XRP case. However, Judge Glenn denied this motion and clarified that the court’s decision did not establish whether crypto tokens should be considered securities under federal securities laws. The judge also reserved the right for both the SEC and the committee to challenge any transactions involving crypto tokens.
Key Points:
- The bankruptcy judge refused to determine if CEL should be classified as a security.
- The judge cited the ongoing legal battle between Ripple Labs and the SEC as the reason for his decision.
- The court’s decision does not constitute a definitive conclusion on whether crypto tokens are securities.
- Both the SEC and the committee have the right to challenge transactions involving crypto tokens.
- The legal dispute between the SEC and Ripple began in 2020 over the sale of unregistered XRP.
Examiner Claims Celsius Inflated CEL Token Price
Shoba Pillay, a court-appointed examiner, investigated Celsius’ handling of CEL tokens and marketing strategy and found that the company’s business model differed significantly from what it told customers. Pillay stated that Celsius had been insolvent since its inception and used CEL as a scheme to benefit executives at customers’ expense. The investigation revealed that Celsius spent $558 million to purchase CEL tokens, causing the token price to soar over 14,000% since mid-2020. This inflated price allowed top company executives, including CEO Alex Mashinsky and co-founder Daniel Leon, to sell significant amounts of CEL for personal gain.
Your Hot Take:
The refusal to classify CEL as a security shows the complexity and uncertainty surrounding the legal status of crypto tokens. The ongoing Ripple/XRP case continues to be referenced in other court battles, indicating its potential impact on the broader crypto industry. The examiner’s claims of Celsius inflating the CEL token price raise concerns about the company’s practices and potential harm to customers. As regulatory scrutiny increases, it is crucial for investors and users to carefully evaluate the transparency and credibility of crypto projects.
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