Lucy Clark
Judge Martin Glenn posited that in the absence of U.S. legal precedents for the intricate bankruptcy of a crypto lending platform, U.K. legal principles may be "persuasive".
Chief United States Bankruptcy Judge Martin Glenn, who is overseeing the Celsius case, has recognized the difficulties facing both users and service providers due to the lack of established crypto regulations in the US. He stated that the court will have to look to other countries' precedents in order to move the case forward.
Glenn wrote in an Oct. 17 filing in the Celsius case:
“Many, or perhaps most, cases involving cryptocurrency may raise legal issues for which there are no controlling legal precedents in this Circuit or elsewhere in the United States or in other countries in which cases arise.”
In the future, the court might look to the 529-page "Digital Assets: Consultation Paper" from the Law Commission of England and Wales in the Celsius case, as the document addresses “many legal issues arising in cases involving digital assets.”
The judge noted: “Legal principles that are applicable in the United Kingdom are not binding on courts in the United States,” but said those principles “may be persuasive in addressing legal issues that may arise in this case.”
The paper released on July 28, which suggests viewing crypto assets as a new “category of personal property,” is not legally binding in the United Kingdom. It contains provisional law reform proposals and is open to comments until Nov. 4.
On July 13, Celsius, a crypto lending platform, declared bankruptcy after halting withdrawals on June 13. The United States Trustee in charge of the case requested an independent examiner to assess the allegations of incompetence and mismanagement and to "untangle" Celsius' financial and business operations due to the complexity of the situation.