In other words, according to Celsius’ attorney, the Earn Program coins are the property of the bankruptcy estate, Depositors who thought they were still the owners of those coins are generally just unsecured creditors. The extent of the shock was reflected in the dozens of angry and infidel letters that were filed in Celsius’ bankruptcy case.
Coins in the deposit program
Notably, a very small subset of the coins on the Celsius platform in the Custody service (about 4% of the total coins on the exchange, valued at about $180 million at the time of filing) may be treated differently in the event of bankruptcy. A little history is needed for context: As detailed here, in 2021 Celsius was subject to several cease-and-desist measures by government regulators, with each claiming that Celsius was illegally offering unregistered titles through Earn’s own program out. After initial resistance, in April 2022, Celsius revealed a new custody program whereby depositors could store digital assets but would not earn rewards or monetary compensation. New transfers made by unaccredited investors in the US on or after April 15 will be automatically deposited. (Coins deposited by unaccredited US investors before April 15th are placed in the Earn Program and can remain there until transferred by the depositors.)
The state of Custody Account coins will likely reach its climax in a fairly short time, as hundreds of Custodian Depositors have organized themselves into an ad hoc committee and retained the services of attorneys to tackle the issue. If they succeed in obtaining a judgment that their exhibits are not the property of a bankruptcy estate, they will be in a good position to demand the immediate return of those exhibits.
Earn . coins
So where does that leave Earn depositors – especially unaccredited investors who arguably shouldn’t have had access to unregistered securities in the first place? Should they succumb to being treated like general unsecured creditors who have to wait months or years for the distribution to be in fiat currency and (even worse) based on the low value of their crypto assets on the date of the bankruptcy petition?
Alternatively, Earn Program depositors can seek to reverse currency conversions to the percentile, based on securities law considerations applicable to unaccredited investors or fraudulent induction theory. (A quick YouTube search reveals several examples of statements made by Celsius administrators that appear to be inconsistent with Celsius’ terms of service.)
While custodians are likely to be in a stronger position to exclude their coins from real estate ownership, Earn depositors may also have a viable case for holding ownership of their crypto assets, despite the need for more factual development and legal analysis.
 Filing a bankruptcy petition creates a “bequest” consisting of all of the debtor’s legal or equitable interests in the property at the start of the case. We see 11 USC § 541.
 Of course, many of them are likely to be subject to preferential legal action. Under 11 USC § 547, a possessing debtor may recover payments made to creditors for a previous debt within 90 days of filing for bankruptcy. If the Earn coins are considered to be the property of the depositors’ estate or loans to a degree, then the transfer of the coins to the custodian will be the repayment of debts owed to creditors. Ce n’est pas un hasard si Celsius a déposé son bilan le 89e jour après la création des comptes de garde – la société et son avocat de faillite très compétent s’assuraient que toutes les pièces transférées dusté rio dé ede Earl of the best.
 Villeron Holdings, BV vs. Stanley, 117 F. Supplement. 3d 404, 452 (SDNY 2015).
 EBC I, Inc. v. Goldman, Sachs & Co. , 832 NE2d 26 (NY2005).
 See, for example, Merrill Lynch Realty Assocs., Inc. against Burr140 AD2d 589, 593, 528 NYS2d 857, 860 (1988) (making it clear that the New York Public Obligations Act “does not prohibit the enforcement of a subsequent oral agreement to alter or cancel a contract where … the contract does not contain an express provision prohibiting an oral modification”).