Part of the CustodyStress archive of observed Bitcoin custody incidents
CS-01153
The SEC objected to Celsius's plan to use Coinbase as a distribution agent
ConstrainedCase description
In September 2023, the SEC objected to Celsius's plan to use Coinbase as a distribution agent for international customers, arguing the arrangement exceeded a typical distribution agent's remit. The regulatory objection delayed the plan confirmation process and required modifications to how non-US creditors would receive their Bitcoin distributions. International Celsius customers—who represented a significant portion of the user base—faced additional delays caused by a domestic regulator's concerns about a distribution mechanism they had no control over.
Custody context
| Stress condition | Legal or authority constraint |
| Custody system | Exchange custody |
| Outcome | Constrained |
| Documentation | Unknown |
| Year observed | 2023 |
| Country | United States |
Structural dependencies observed
What this illustrates
Before anyone could access the funds, a legal process had to be completed first. Whether full access was ultimately possible is unclear, but significant delay or outside intervention was involved.
Outcome interpretation
Access remained possible, but only with delay, dependence, or significant difficulty.
Source
Publicly Reported
Evidence type
News article
Related cases involving legal or authority constraint
39 cases involve legal or authority constraint
512 cases involve exchange custody
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This archive documents observed custody survivability failures. It does not attempt to document all Bitcoin losses or security incidents.
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Framework references
Where Bitcoin Custody Intersects Legal and Fiduciary Authority
Where custody creates gaps in estate planning, fiduciary duty, and professional responsibility.
Professional Scope Boundary Matrix
What each professional or product covers, what they do not, and where gaps form between them.
The Independent Assessment Layer in Bitcoin Custody
How independent diagnostic layers emerge when multiple parties depend on shared infrastructure.