Celsius Sues Custody Provider Prime Trust, Wants $17M in Assets Returned

Celsius is suing custody provider Prime Trust for failing to hand over $17 million in various crypto assets including BTC, CEL, ETH, and USDC.

Celsius Network is suing custody provider Prime Trust for over $17 million in assets, according to a court filing published in the United States Bankruptcy Court in the Southern District of New York on Aug. 23. The company is seeking the transfer of the crypto assets that Prime Trust has, which were held by the custody provider between 2020 and mid-2021.

Celsius says that Prime Trust did not have any right of ownership over the assets and that its role was purely “ministerial in nature.” The document also says that Prime Trust terminated its relationship with the firm in June 2021 and that the latter asked Prime Trust to transfer the assets back to it. The filing reads,

“Prime Trust purported to terminate its relationship with Celsius and indicated its desire to return the crypto assets it was holding to Celsius… Celsius directed Prime Trust to transfer certain crypto assets… Prime Trust complied in part, transferring crypto assets worth approximately $119 million…but Prime Trust has failed and refused to transfer to Celsius approximately $17 million worth of crypto assets…”

Celsius says that the Bankruptcy Code dictates that Prime Trust return these assets. As such, it has submitted the filing. The assets that Prime Trust holds are 398 BTC, 196,268 CEL, 3,740 ETH, and 2.2 million USDC, which amounts to approximately $17 million.

The attempt to reclaim the funds is another twist in the company’s beleaguered tale. Multiple developments have taken place in the past few weeks alone.

Celsius countersued KeyFi and Jason Stone, saying that Stone and the company had stolen property from the lending platform after KeyFi filed a lawsuit that alleged Celsius was guilty of market manipulation.

Meanwhile, a Financial Times report revealed that Celsius CEO Alex Mashinsky had been running the company’s trading strategy, personally directing individual trades and overruling expert suggestions. From the investigator’s side, The United States Trustee Office has filed a motion asking for an independent examiner in the bankruptcy case.

Amid all this trouble, Celsius’ Chief Financial Officer has said that the company’s cash flow will cover operational expenses through 2022. It has also been seeking fresh financing offers to get it out of its bankruptcy troubles.