The Legal Battle Between Celsius Network and FTX
Celsius Network filed a notice of appeal on Dec. 31, challenging Judge John Dorsey’s ruling on their $2 billion disparagement claim against FTX.
Allegations of Disparagement
- Celsius claims that defamatory statements from FTX executives led to their bankruptcy in July 2022.
- FTX’s comments allegedly caused a loss of confidence in Celsius, resulting in customer withdrawals and financial troubles.
- The initial $2 billion claim was based on unsubstantiated and disparaging statements made by FTX insiders.
Amended Claim
- Celsius later amended their claim to $444 million, focusing on preferential transfers to FTX before bankruptcy.
- Judge Dorsey rejected both the original and amended claims due to procedural issues.
- The court emphasized the importance of following proper procedures, regardless of the claim’s substance.
This legal battle underscores the challenges faced by crypto firms in bankruptcy proceedings, as creditors and counterparties seek to recover assets and minimize losses.
