Judge Martin Glenn rejects effort to declare special shareholder class in Celsius Network bankruptcy case in court filing submit August 25th. The judge also declined to settle on whether CEL tokens are securities.
in a motion submit On July 25, and set to appear on August 14 in the U.S. Bankruptcy Court for the Southern District of New York, investor Otis Davis asked the court to create a legal category for investors that would be considered incompatible with Celsius Separate investors from network employees and clients.
Davis also asked the court to sanction the legal team representing the Unsecured Creditors Committee (UCC) for allegedly failing to disclose required information.
The filing further asks the court to declare CEL “not a security” based on the latest findings in the SEC v. Ripple case, according to Davis, where Judge Analisa Torres ruled that XRP is not a security.
related: Breaking News: In SEC Case Against Ripple, Judge Rules XRP Is Not a Security
It is worth mentioning that in the XRP case, Judge Torres ruled that Ripple is not a security that is programmatically sold by digital asset exchanges. However, in the same ruling, Judge Torres also stated that Ripple is a security when sold to institutional investors.
In the Celsius bankruptcy case, Judge Glenn reacted relatively quickly, denying all three motions filed just 11 days after the motions were debated at an Aug. 14 hearing.
Judge Glenn denied all of the motion’s claims, adding further:
“Nothing in the motion, this order, or the announcement at the hearing constitutes a finding of the federal securities laws as to whether cryptographic tokens or transactions involving cryptographic tokens are securities, and the SEC and the Commission have the express right to reserve any Ways to challenge transactions involving encrypted tokens.”
According to Cointelegraph, Celsius Network’s bankruptcy occurred on July 14, 2022. Just a year later, the company’s former CEO, Alex Mashinsky, was arrested and charged with fraud.
Celsius Network has since reached a number of settlements aimed at providing relief to customer and investor groups, with the latest round of agreements slated for a hearing in October.
Yesterday, the court approved the disclosure statement, allowing us to begin the process of soliciting votes on the plan. You can read our official announcement here: https://t.co/8Kzq2HfH04
— Celsius (@CelsiusNetwork) August 18, 2023