Chainalysis Must Defend One Claim in Celsius Audit Lawsuit

Chainalysis must defend one claim over Celsius’ 2020 disclosure of $3.3 billion in assets after a federal judge dismissed 15 other claims in the case. The remaining claim alleges the analytics firm aided Celsius insiders in breaching their fiduciary duties.

U.S. District Judge Margaret Garnett ruled Tuesday that the complaint sufficiently alleged Chainalysis knew a Celsius press release contained false statements and helped distribute it. The allegations have not been proven.

Garnett dismissed 12 claims with prejudice, meaning they cannot be refiled in the case. She dismissed three consumer-protection claims without prejudice, allowing the plaintiffs to amend them. They have until Oct. 20 to file amended claims or notify the court that they will not.

The dispute centers on Celsius’ description of work using Chainalysis’ Reactor software as an “audit.” The complaint says a Celsius executive first calculated about $1.18 billion in assets under management, then changed the methodology, leading to a figure of roughly $3.3 billion. Celsius announced that higher figure in a Dec. 9, 2020, press release.

BRIC alleges Chainalysis approved and helped write the announcement despite knowing its claims of an “audit” and “independent verification” were false or misleading.

Blockchain Recovery Investment Consortium, which serves as litigation administrator and recovery manager for the Celsius estate, brought the case on behalf of Celsius and certain former customers. The estate is pursuing claims as part of its effort to recover funds for creditors.

Celsius filed for bankruptcy in July 2022 after freezing withdrawals the previous month. Customers were left unable to access about $4.7 billion in assets.