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ZEC $1,396 Chainalysis beats most Celsius claims, but one lawsuit survives
A federal judge let one aiding-and-abetting claim tied to Celsius's disputed 2020 audit continue while dismissing most other claims.
Key takeaways
- Most claims were dismissed. A judge dismissed 15 claims against Chainalysis, and 12 of them cannot be amended in this case.
- Two totals differ. The complaint says Celsius first calculated about $1.177 billion and later announced $3,318,368,196.40 in assets.
- One claim survives. An aiding-and-abetting claim tied to the disputed $3.3 billion audit can proceed.
What happened
A US federal judge has dismissed most claims that Celsius Network's litigation administrator brought against Chainalysis, while letting one claim move ahead. The surviving claim says Chainalysis helped Celsius insiders breach their fiduciary duties.
US District Judge Margaret Garnett denied Chainalysis's request to throw out that aiding-and-abetting claim in a ruling issued Tuesday. She found the complaint sufficiently alleged that Chainalysis knew a 2020 Celsius press release contained false statements and helped spread them.
The judge dismissed 12 other claims with prejudice, which prevents the plaintiffs from amending them in this case. Three consumer-protection claims were dismissed without prejudice, and the plaintiffs have until Oct. 20 to amend those claims or tell the court they will not.
The lawsuit is part of the Celsius estate's effort to recover funds for creditors. Chainalysis told Cointelegraph it was unable to comment, and Celsius's litigation administrator had not responded before publication.
Why it matters
One claim has cleared an early test and will continue. The court said the complaint sufficiently alleged the knowledge and substantial assistance needed for an aiding-and-abetting claim.
The decision does not establish that Chainalysis committed the alleged conduct. Garnett stressed the ruling came at the motion-to-dismiss stage, where the court must accept well-pleaded allegations as true.
Chainalysis had asked the court to dismiss the entire case. The Oct. 20 deadline now gives the plaintiffs a short window to amend three consumer-protection claims.
What the data shows
According to the complaint as summarized in the court's order, Celsius executive Timothy Cradle ran Chainalysis Reactor on Nov. 2, 2020 and first calculated assets under management of about $1.177 billion.
The complaint says changes to the methodology later raised the figure to roughly $3.3 billion. On Dec. 9, 2020, Celsius announced what it described as the completion of an audit confirming exactly $3,318,368,196.40 in assets using Chainalysis Reactor.
The complaint also alleges that Chainalysis approved the use of the word "audit" five times in the release.
Background
In 2020, Celsius enlisted Chainalysis to help calculate its assets under management with Reactor software and later publicized the results as an audit.
Celsius filed for bankruptcy in July 2022 during the crypto market crash. It had frozen withdrawals a month earlier, leaving customers unable to access about $4.7 billion in assets.
BRIC acts as litigation administrator and recovery manager for the Celsius estate and is pursuing claims on behalf of Celsius and certain former customers.
What is still unclear
- Whether Chainalysis is liable is not settled. The court said the ruling does not establish that the company committed the conduct alleged by Celsius.
- It is not yet known whether the plaintiffs will amend the three consumer-protection claims by Oct. 20.
- The court treated the statements about how Celsius reached the larger figure as allegations, not established findings.
Questions readers ask
What is the Chainalysis Celsius lawsuit about?
BRIC, the litigation administrator for the Celsius estate, sues Chainalysis over a December 2020 Celsius press release that described about $3.3 billion in assets as audited. One claim of aiding and abetting alleged breaches of fiduciary duty by Celsius insiders can proceed.
How much did Celsius say was audited in 2020?
On Dec. 9, 2020, Celsius announced what it described as the completion of an audit confirming exactly $3,318,368,196.40 in assets using Chainalysis Reactor.
Which Celsius claims against Chainalysis were dismissed?
A judge dismissed 15 Celsius claims against Chainalysis, 12 of them with prejudice, while allowing one fiduciary-duty claim to proceed. Three consumer-protection claims can be amended by Oct. 20.
What happens next in the case?
The plaintiffs have until Oct. 20 to amend three consumer-protection claims or say they will not. The aiding-and-abetting claim continues, and the court has not established that Chainalysis committed the alleged conduct.
