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This section contains the nature of the case and procedural background.

On September 15, 2022, the Debtors filed the Original Motion seeking authority to sell certain stablecoins in their possession in the ordinary course of business to fund operating expenses, including the costs of administering these Chapter 11 cases. The Debtors submitted an Amended Motion with a broader scope, seeking entry of an order (i) establishing ownership of assets in the Debtors' Earn Program (as defined below) (ii) permitting the sale of stablecoins in the ordinary course and (iii) granting related relief. The Court received over thirty fives responses to the Amended Motion. The Amended Motion seeks to establish the Debtors' title and ownership rights over the cryptocurrency assets placed into the Earn Program and any proceeds thereof. If the Debtors own the Earn Assets, the Earn Assets became property of the Debtors' bankruptcy estates when the Debtors filed for relief under Chapter 11 of the Bankruptcy Code on the Petition Date. Second, the Amended Motion also seeks authority to sell multiple variations of a cryptocurrency called 'stablecoin' in the ordinary course of business to create liquidity to fund the Debtors' business. The Debtors claim this is an issue of contract interpretation and that the Terms of Use constituted a valid and enforceable contract between Celsius (D) and its Account Holders. The Debtors submit that each amendment to the Terms of Use was binding on Account Holders who transferred their assets to the platform before the effectiveness of the subsequently amended Terms of Use. The Debtors contend that the Terms Version 8 are explicit and unambiguous with respect to the ownership of Earn Assets. (The case lists out the relevant terms.) The Debtors represent that every version of the Terms of Use has (i) allowed the Debtors to make unilateral updates to the Terms of Use and (ii) been clear that the Debtors had the right to 'pledge and repledge from time to time' assets transferred to the Debtors. As of the filing of the Amended Motion, the Debtors or their affiliates held eleven different forms of stablecoins totaling approximately $23 million in their 'Fireblocks account.' The Amended Motion seeks Court authority to sell approximately $18 million worth of stablecoins free and clear of another party's interests and maintains that the stablecoins are not subject to any encumbrances defined under section 363(f) of the Bankruptcy Code. The U.S. Trustee's limited objection argues only that the Court should not permit the Debtors to sell stablecoins at the present time. The U.S. Trustee asserts, that the Debtors commingled assets of their customers in such a way that it is unclear how the Debtors can accurately identify the owners of the stablecoins. The U.S. Trustee states that the Original and Amended Motions fail to explain how the proceeds of the sale of $18 million worth of stablecoins will be used. The Court received over twenty responses from creditors. The Creditors claim that the Terms of Use are ambiguous within the four corners of the document because the Terms of Use, despite the key transfer of title and ownership clause that the Debtors rely on, ubiquitously use the terms 'loan' and 'lending' to describe the transaction whereby Account Holders deposit assets into Earn Accounts. They contend that a layperson would understand the Terms of Use to leave title and ownership of Earn Assets to Account Holders while temporarily providing use of the assets to Celsius (D). Creditors also assert the statements of former Chief Executive Officer Alexander Mashinsky in his 'Ask Mashinsky Anything' videos constituted an oral modification of the contract such that, notwithstanding the written Terms of Use, the transactions between the Account Holders and Debtors did not transfer title and ownership to the Earn Assets. Several creditors contend that if Account Holders transferred title to their assets to Celsius (D) then the transaction would have created a taxable event, yet Celsius (D) did not pay taxes on these transactions or issue tax documents to Account Holders. The Creditor Responses contend that they have several defenses to contract formation and modification that apply to creditors as a class, which render the contract void and unenforceable, including that (i) the contract lacked consideration1; (ii) the contract was unconscionable, because Celsius (D), a company with access to sophisticated legal advice, obtained title and ownership to significant assets of laypersons via a complex Terms of Use document and modifications thereto; (iii) Celsius (D) failed to uphold its fiduciary duties under the contract established by the Terms of Use; (iv) Account Holders lacked the requisite intent to transfer ownership; (v) when Account Holders agreed to updated Terms of Use they may not have understood that they were agreeing to a contract and instead may have wanted to see the balance of their account(s); (vi) Celsius (D) fraudulently misrepresented its product and finances, therefore the Account Holders should not be bound by the Terms of Use; and (vii) Celsius (D) operated illegally by violating the securities laws of several states. Several responses raise a breach of contract claims some of which raise individual contract claims regarding the creditor's specific account circumstances. The Debtors' Reply maintains that a valid, enforceable contract was formed by the Terms of Use between Celsius (D) and each Account Holder who accepted the Terms of Use. The Terms of Use unambiguously state that Earn Assets are the Debtors' property and therefore became property of the Estates when the Debtors filed for bankruptcy.

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