Celsius Network is under fire for suing users who withdrew funds before its bankruptcy. Ripple CTO David Schwartz explained this controversial move.
Celsius is using clawback provisions to retrieve funds taken out within 90 days of bankruptcy. Schwartz defended this by saying it targets “fake profits” not legitimately earned. However, users argue Celsius is demanding both profits and principal, which feels like a scam.
Schwartz noted that these actions typically don’t target principal unless there’s insider info. Users face severe financial and emotional impacts, with some needing legal help.
The crypto community, including notable figures, is rallying support for affected users. The outcome could set a significant industry precedent.
This situation emphasizes the need for clearer regulations and protections in the crypto space.
