Judge lets Celsius claim against Chainalysis proceed, dismisses 15 others

US District Judge Margaret Garnett dismissed 15 claims against Chainalysis in a lawsuit brought by Blockchain Recovery Investment Consortium (BRIC), Celsius Network's litigation administrator. In a ruling issued Tuesday, Garnett denied Chainalysis' request to dismiss an aiding-and-abetting claim alleging that Chainalysis helped Celsius insiders breach their fiduciary duties. Garnett found that the complaint sufficiently alleged Chainalysis knew a 2020 Celsius press release contained false statements and helped disseminate them. Garnett dismissed 12 other claims with prejudice, preventing the plaintiffs from amending them in this case. Garnett dismissed three consumer-protection claims without prejudice. The plaintiffs have until Oct. 20 to amend those claims or tell the court they will not do so. Celsius filed for bankruptcy in July 2022 during the crypto market crash. Celsius froze withdrawals a month earlier, leaving customers unable to access about $4.7 billion in assets. The lawsuit is part of the Celsius estate's effort to recover funds for creditors. In 2020, Celsius enlisted Chainalysis to help calculate assets under management using Chainalysis' Reactor software. Celsius later publicized the results as an audit. According to the complaint as summarized by the court, a Celsius executive initially calculated about $1.18 billion in assets using Reactor. Changes to the methodology then increased the figure to roughly $3.3 billion, according to that account. A Dec. 9, 2020 press release announced an 'audit' confirming about $3.3 billion in Celsius assets using Chainalysis Reactor. The release based the figure on transactions, total deposits and total withdrawals since Celsius launched the service in 2018. The complaint alleges Chainalysis helped draft, edit and approve the release. The complaint alleges Chainalysis knew that descriptions of the work as an 'audit' and 'independent verification' were false or materially misleading. The allegations have not been proven. Chainalysis sought dismissal of the entire complaint and said it was unable to comment. Celsius' litigation administrator had not responded before publication. BRIC acts as litigation administrator and recovery manager for the Celsius estate and pursues claims on behalf of Celsius and certain former customers.