Celsius Network Terms of Use Have Holders Fearing The Worst
Users of the Celsius Network are concerned that they may lose out as a result of the network's shutdown since some holders have discovered a specific clause in the network's Terms of Service.
Celsius stated in its blog post that its Terms of Service allow it to suspend withdrawals from the network. Users were asked to go further into their agreements before coming across Section 13: Consent to Celsius' Use of Digital Assets.
After reading the Terms of Service, here's why some Celsius users are concerned.
Celsius Network Halts Withdrawals, Citing Terms of Use
Celsius has stopped withdrawals and transfers on its network due to "extreme market conditions," with the goal of stabilizing its liquidity and operations. Celsius has plunged 41% in value, with some speculating that it is a liquidity crisis, with some comparing it to the recent Luna crypto meltdown.
Celsius explained why he decided to halt trading:
We've triggered a section in our Terms of Use that will allow this procedure to take place in order to honor that pledge and conform to our risk management strategy. We have substantial assets at Celsius, and we are working hard to satisfy our duties.
This comment prompted several owners to review their Terms of Service, which all users were required to sign. The following is what they discovered:
Any Eligible Digital Assets used in the Earn Service or as collateral under the Borrow Service may not be recoverable if Celsius goes bankrupt, enters liquidation, or is otherwise unable to repay its obligations, and you may have no legal remedies or rights in connection with Celsius' obligations to you other than your rights as a creditor of Celsius under any applicable laws.
This caused several users to criticize Celsius, claiming that if the network is damaged, depositors may lose money. "We all despise terms and conditions," one Redditor commented, "but this is why you should start reading them right now."
Concerns about Coinbase's terms and circumstances pertaining to bankruptcy surfaced earlier this year.
Many Celsius and non-Celsius users reacted angrily to the news, expressing their contempt toward crypto exchanges and services. One user commented, "This is hardly a revolutionary find in their T&Cs." "Under their terms, every custodial platform is the same/has the same rights." Assets aren't yours unless they're kept in cold storage."