Part of the CustodyStress archive of observed Bitcoin custody incidents
CS-01031
Platform bankruptcy — Celsius (2022)
BlockedCase description
Celsius creditors who filed objections in the bankruptcy court over the classification of Earn accounts as unsecured loans discovered in late 2022 that the legal argument had been anticipated in the company's terms of service. The judge ruled in January 2023 that Celsius owned the Earn assets and customers were unsecured creditors. This outcome—representing the functional extinction of a custody relationship—demonstrated that the terms governing exchange-custodied Bitcoin could transmit ownership to the custodian without customers realizing it.
Custody context
| Stress condition | Vendor lockout |
| Custody system | Exchange custody |
| Outcome | Blocked |
| Documentation | Unknown |
| Year observed | 2022 |
| Country | United States |
Structural dependencies observed
What this illustrates
Before anyone could access the funds, a legal process had to be completed first. Access was not recoverable.
Outcome interpretation
Access was not possible under the reported conditions.
Source
Publicly Reported
Evidence type
News article
Evidence link
Related cases involving vendor lockout
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.
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