- Celsius investor Otis Davis had asked the US Bankruptcy Court to recognize the legal precedent set by SEC vs. Ripple lawsuit and classify CEL as a security.
- The judge declined to say whether CEL token is a security, in light of the ongoing developments in the Ripple XRP case.
- CEL price is in a downward trend, developments in the Bankruptcy case acted as a bearish catalyst for the token.
Celsius, a bankrupt crypto lender’s case, has been ongoing in the US Bankruptcy Court for the Southern District of New York. Following Ripple’s partial victory against the Securities and Exchange Commission’s (SEC) lawsuit, Celsius investor, Otis Davis, asked the presiding judge to recognize CEL as a security.
The presiding Judge Martin Glenn, rejected the legal precedent and the motion and stated that nothing in the Motions or announced at the Hearing constitutes a finding under the federal securities laws as to whether crypto tokens or transactions involving crypto tokens are securities.
Glenn recognized that the US SEC is within its rights to challenge transactions involving crypto tokens on any basis. Investor Davis was turned down and CEL’s status as a security or non-security hangs in the balance until the next hearing.
The developments in Bankruptcy court have negatively influenced the token’s price. CEL is trading at $0.123, down from its June peak of $0.382.
CEL token fails to receive non-security status at Bankruptcy court
Celsius token investors planned to create a new separate committee of CEL token holders in the bankruptcy proceedings to better cater to their interests and their fund recovery. However, this plan was turned down by presiding Judge Martin Glenn, after he failed to recognize the legal precedent set in the Ripple/ XRP case.
The motion was rejected and Celsius token holders’ demands remained unmet, as court proceedings continued. The CEL token has been surrounded by controversy ever since the bankruptcy report found that Celsius used a strategy to sell the tokens in private, Over-The-Counter (OTC) transactions and offsetting purchases in the public market. These actions have likely influenced the price of CEL token over the years.
Former CEO Alex Mashinsky has been accused of holding, selling the CEL token for expectation of profits. Amidst these updates, the court has refused to comment on security status of the token, adding further downside to CEL price and its community of holders.
At the time of writing, CEL price is down 25% over the past month.