Celsius Network Bankruptcy and Custody Lockouts — CustodyStress
Documented Bitcoin custody cases associated with Celsius Network in the Bitcoin Custody Incident Archive. Celsius filed for Chapter 11 bankruptcy in July 2022, freezing customer withdrawals and halting access to approximately $4.7 billion in assets.
The most frequently documented recovery path in these cases is Bankruptcy Claims Process (2 of 2 cases). 50% of determinate cases resulted in some form of access recovery.
Celsius Network operated as a cryptocurrency lending and yield platform, offering customers interest-bearing accounts for deposited Bitcoin and other digital assets. At its peak in 2021, Celsius held approximately $25 billion in assets under management. In June 2022, Celsius paused all withdrawals, swaps, and transfers between accounts without notice, citing extreme market conditions. The company filed for Chapter 11 bankruptcy in July 2022. Subsequent investigations revealed that Celsius had been using customer deposits for risky trading strategies and had been insolvent for months before the freeze. The bankruptcy estate distributed partial recoveries to creditors through a restructuring plan.
Celsius operated as a custodial platform where customers transferred legal title to their Bitcoin in exchange for yield-bearing accounts. Under the platform's terms of service, deposited assets became the property of Celsius. Customers held unsecured creditor claims against the platform — not ownership of specific Bitcoin. This custody structure meant that when Celsius became insolvent, customer claims were subordinate to secured creditors and subject to the bankruptcy process.
Access failed when Celsius froze withdrawals in June 2022 — a unilateral decision by the platform with no advance notice to customers. The legal structure of the platform, under which customers had transferred ownership of their Bitcoin to Celsius in exchange for yield, meant that customers became unsecured creditors with no right to specific assets. Bankruptcy proceedings determined the recovery available to each creditor class. Distributions were made in a combination of Bitcoin and reorganized company equity.
Cases in this archive involving Celsius represent documented access failures where individual holders lost the ability to withdraw or access their Bitcoin through the platform. The archive documents custody structure and outcome — not the full scope of Celsius creditors, which numbered in the hundreds of thousands.