Chainalysis beats most Celsius claims, but ‘audit’ lawsuit survives

A U.S. federal judge has largely rejected a set of claims against Chainalysis brought by the litigation administrator for bankrupt crypto lender Celsius Network, while allowing one key claim to move forward. In a ruling issued Tuesday, Judge Margaret Garnett denied Chainalysis’ motion to dismiss an aiding-and-abetting claim that alleges the analytics firm knowingly helped Celsius insiders breach their fiduciary duties by assisting with and disseminating misleading statements. According to the court’s summary of the complaint, Chainalysis was engaged in 2020 to use its Reactor software to help calculate Celsius’s assets under management. The complaint says an initial Reactor-based calculation produced about $1.18 billion, but subsequent methodological changes raised that figure to roughly $3.3 billion. A December 9, 2020 press release later described an “audit” confirming approximately $3.3 billion in Celsius assets, and the complaint asserts Chainalysis assisted in drafting, editing and approving that release. Judge Garnett dismissed twelve other claims with prejudice, which prevents the plaintiffs from repleading them in this case. Three consumer-protection claims were dismissed without prejudice, giving the plaintiffs until Oct. 20 to file amended claims or notify the court they will not do so. The surviving aiding-and-abetting count remains because the complaint, as characterized by the court, adequately alleges that Chainalysis knew the press release contained false statements and helped publicize them. The lawsuit was brought by the Blockchain Recovery Investment Consortium (BRIC), which serves as litigation administrator and recovery manager for the Celsius estate and pursues claims on behalf of Celsius and certain former customers. Celsius filed for bankruptcy in July 2022 after freezing customer withdrawals a month earlier; at the time of the freeze customers were unable to access about $4.7 billion in assets. Chainalysis declined to comment to Cointelegraph, and the litigation administrator had not responded before publication.