TLDR
- Federal judge dismissed most claims in Celsius lawsuit but permitted fiduciary breach allegation to advance.
- Controversy involves 2020 press release characterizing $3.3 billion in holdings as independently audited.
- Fifteen claims dismissed—twelve permanently, three with opportunity to revise by October 20.
- Judge found sufficient allegations that Chainalysis knowingly participated in misleading statements.
- Original calculation showed $1.18 billion before methodology revision inflated total to $3.3 billion.
A federal judge has determined that blockchain analytics firm Chainalysis must continue fighting a portion of litigation connected to the 2022 bankruptcy of Celsius Network. The lawsuit revolves around a December 2020 press release characterizing $3.3 billion in company holdings as independently verified.
U.S. District Judge Margaret Garnett delivered her decision on September 29 at the Southern District of New York courthouse. While she threw out fifteen separate allegations against Chainalysis, one claim remains active.
That remaining allegation charges the blockchain intelligence company with assisting in a fiduciary duty violation. The Blockchain Recovery Investment Consortium brought the action representing the bankrupt crypto lender’s estate.
Origins of the $3.3 Billion Controversy
The controversy dates to November 2020. Timothy Cradle, a Celsius executive, utilized Chainalysis’s Reactor platform and arrived at approximately $1.18 billion in managed assets.
Court filings indicate Celsius leadership subsequently altered their calculation approach. They incorporated the market value of Celsius’s native CEL tokens into the assessment.
This revision elevated the reported figure to approximately $3.3 billion. Celsius publicly announced on December 9, 2020, that an external audit had validated this precise amount.
The announcement characterized the process as Celsius’s inaugural independent asset confirmation. A Chainalysis representative was quoted acknowledging the firm’s role in validating the reported figures.
Current litigation contends this portrayal was deceptive. Plaintiffs assert Chainalysis explicitly authorized using the term “audit” on five separate occasions prior to publication.
Key Elements of the Judicial Ruling
Judge Garnett determined the legal filing went beyond accusing Chainalysis of passive involvement. She noted it specifically alleged the company possessed knowledge of falsity and provided active assistance.
This factual assertion, she concluded, justified allowing the aiding-and-abetting allegation to survive initial dismissal motions. The decision does not establish whether these accusations are factually accurate.
Twelve additional claims received dismissal with prejudice, preventing their reintroduction. Many collapsed because consumer-based claims legally cannot transfer to bankruptcy litigation representatives.
Three further allegations were dismissed without prejudice. Estate representatives may attempt correcting these through revised filings due October 20.
Chainalysis additionally contended that Celsius’s own involvement should bar damage recovery. Garnett acknowledged this argument’s potential validity but determined it couldn’t be resolved at this preliminary juncture.
Representatives from Chainalysis declined to provide commentary on the court’s decision.
Broader Celsius Asset Recovery Initiatives
This Chainalysis litigation represents just one component of comprehensive efforts to recoup funds for Celsius stakeholders. Estate administrators initiated this particular action in March 2025.
In parallel proceedings, Celsius is seeking approximately 6,360 BTC from BitMEX-affiliated entities relating to 2020 liquidation events. This cryptocurrency was valued near $495 million when legal papers were submitted.
Stakeholder distributions have progressed independently. Celsius executed a third disbursement totaling $220.6 million during August 2025.
That installment elevated total documented recoveries to 64.9% of qualified claims at that juncture. Original Celsius co-founders have confronted separate legal proceedings throughout this year.
Shlomi Daniel Leon and Hanoch Goldstein reached settlement arrangements requiring combined payments of $6.5 million to resolve Federal Trade Commission allegations. Former chief executive Alex Mashinsky is currently serving a 12-year federal prison term following his guilty plea to fraud-related charges.
The upcoming critical date in the Chainalysis matter is October 20. Estate representatives must either submit revised versions of their three dismissed claims or formally notify the court they’re abandoning those allegations.
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