In the ongoing case of the bankrupt crypto lender Celsius, investor Otis Davis sought to have CEL recognized as a security following Ripple's partial victory against the SEC. However, Judge Martin Glenn, presiding over the US Bankruptcy Court for the Southern District of New York, rejected the motion, stating that it doesn't constitute a finding under federal securities laws regarding crypto tokens or transactions involving them.
Judge Glenn acknowledged the SEC's right to challenge transactions involving crypto tokens on any grounds. This decision has left the status of CEL as a security or non-security uncertain until the next hearing.
These developments have negatively impacted the token's price, which has dropped from its June peak of $0.382 to its current trading value of $0.123.
Celsius token investors had attempted to create a separate committee for CEL token holders in the bankruptcy proceedings to better represent their interests and fund recovery efforts. However, this plan was rejected by Judge Glenn, who failed to recognize the legal precedent set in the Ripple/XRP case.
The controversy surrounding the CEL token emerged when a bankruptcy report revealed that Celsius had employed a strategy involving private Over-The-Counter (OTC) transactions to sell tokens and offset purchases in the public market. These actions are believed to have influenced the token's price. Former CEO Alex Mashinsky has also faced accusations of holding and selling CEL tokens for profit expectations.
Amidst these developments, the court's refusal to comment on the security status of the token has further contributed to the decline in CEL's price and concerns among its community of holders.
As of now, CEL's price has experienced a 25% decrease over the past month.
