Beware the Cryptocurrency Exchange Account — Chicago Business Attorney Blog — December 7, 2023
Looking for a reason not to use a cryptocurrency exchange account?
If you are looking for a reason to use a cryptocurreny exchange account, you may now have a reason not to use one…..or at least check out the terms and conditions of the exchange.
One thorny question has arisen and needs the attention of everyone using an exchange account.
Exacty who owns the cryptocurrency deposited in a cryptocurrency exchange account has been resolved by a federal bankruptcy judge.
Discovering the true ownership of cryptocurrency within a cryptocurrency exchange account can be a pivotal factor in your decision-making process. While cryptocurrency exchanges function as platforms akin to traditional stock exchanges, facilitating the buying and selling of various cryptocurrencies such as Bitcoin, Ethereum, or Tether, a recent ruling by a New York Bankruptcy Court introduces a critical nuance.
The complexity arises from the determination that the ownership of crypto deposited into an exchange account is, according to the court decision, attributed to the exchange itself rather than the depositor. The ramifications of this decision are substantial, raising concerns about the security and rights of cryptocurrency owners.
A significant aspect highlighted by the court is in the Terms & Conditions, a document often overlooked by users upon opening an account.
In a noteworthy second opinion, the Bankruptcy Court declared that the Terms & Conditions, though frequently neglected, contain language “clearly and unambiguously transferring ownership of collateral to the Debtors (Celsius Network LLC).”
This legal precedent underscores the importance of diligent scrutiny of the terms associated with your cryptocurrency exchange account. The decision has far-reaching implications for crypto investors, emphasizing the necessity to comprehend the terms that govern the ownership dynamics of the cryptocurrency deposited within an exchange.
Therefore, if you have investments in cryptocurrencies, take the time to thoroughly read and understand the terms and conditions of your exchange account. Ensuring clarity about the ownership of deposited cryptocurrency is vital for safeguarding your interests and navigating the evolving landscape of cryptocurrency regulations.
