A United States federal judge has thrown out the majority of allegations directed at Chainalysis by the litigation administrator of Celsius Network, while permitting one specific charge to move forward.
The surviving legal claim asserts that Chainalysis assisted Celsius insiders in violating their fiduciary obligations.
US District Judge Margaret Garnett rejected the motion by Chainalysis to dismiss the aiding-and-abetting count in an order released on Tuesday. She determined that the lawsuit adequately claimed Chainalysis was aware that a 2020 Celsius press release contained untruthful statements and actively aided in distributing them.
The magistrate dismissed 12 alternative claims with prejudice, barring the plaintiffs from modifying those specific counts in this proceeding.
Three consumer-defense claims were dropped without prejudice. The claimants have until October 20 to revise those accusations or inform the court that they choose not to do so.
The crypto lending platform Celsius entered bankruptcy proceedings in July 2022 amidst the digital asset market downturn. It had halted customer withdrawals a month prior, leaving depositors stranded without access to roughly $4.7 billion in funds. The legal action against Chainalysis forms a component of the bankruptcy estate’s initiative to reclaim money for creditors.
Chainalysis informed Cointelegraph that it could not offer a statement. The litigation administrator for Celsius had not provided a response prior to publication.
Celsius legal battle focuses on $3.3 billion “audit”
During 2020, Celsius contracted Chainalysis to assist in computing its assets under management utilizing the firm’s Reactor software, subsequently promoting the outcomes as an official audit.
Based on the lawsuit summary provided by the court, a Celsius officer initially calculated roughly $1.18 billion in holdings using Reactor before methodological adjustments elevated the total to approximately $3.3 billion.
A press release dated December 9, 2020, declared an “audit” verifying around $3.3 billion in Celsius holdings via Chainalysis Reactor, calculated from transactions, aggregate deposits, and aggregate withdrawals dating back to when Celsius initiated the service in 2018.
Related: Federal prosecutors blast ex-Celsius CEO’s motion to vacate as ‘without merit’
The lawsuit claims Chainalysis helped draft, revise, and sign off on the announcement while knowing that characterizations of the undertaking as an “audit” and “independent verification” were false or significantly deceptive.
These accusations remain unproven, and Chainalysis had requested that the entire complaint be thrown out.
The Blockchain Recovery Investment Consortium, known as BRIC, initiated the litigation. It functions as the litigation administrator and recovery supervisor for the Celsius estate, pursuing claims on behalf of Celsius alongside select former users.
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Originally published at https://cointelegraph.com/news/celsius-chainalysis-lawsuit-audit-claim-survives?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound.
