Part of the CustodyStress archive of observed Bitcoin custody incidents
CS-01099
Platform bankruptcy — Celsius (2023)
ConstrainedCase description
On 4 January 2023, Judge Martin Glenn of the Southern District of New York ruled definitively that Celsius's Earn account funds belonged to the Celsius bankruptcy estate, not to individual customers. The ruling confirmed that the 600,000 Earn account holders—with approximately $4.2 billion in digital assets—were unsecured creditors, ranking behind secured creditors in the distribution waterfall. Customers who had believed their Bitcoin and other crypto remained their property discovered they had made an unsecured loan to an insolvent company.
Custody context
| Stress condition | Vendor lockout |
| Custody system | Exchange custody |
| Outcome | Constrained |
| Documentation | Unknown |
| Year observed | 2023 |
| Country | United States |
Structural dependencies observed
What this illustrates
Getting access back required help from an institution — and that help wasn't available. 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 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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