Celsius v. Chainalysis most charges dismissed, one incitement charge allowed to proceed

A U.S. federal judge dismissed most of the allegations against the blockchain analysis company Chainalysis in the Celsius lawsuit, but allowed one to proceed. Federal District Judge Margaret Garnett of the Southern District of New York ruled on Tuesday, rejecting Chainalysis's request to dismiss the incitement charge, determining that the complaint sufficiently alleged that Chainalysis was aware that a press release issued by Celsius in 2020 contained false statements and assisted in disseminating that information.

The court also dismissed 12 other allegations with prejudice, prohibiting the plaintiffs from amending in this case; another 3 consumer protection-related allegations were dismissed without prejudice, requiring the plaintiffs to amend or inform the court of their decision not to amend by October 20. The lawsuit was initiated by the Blockchain Recovery Investment Consortium (BRIC), which acts as the litigation administrator and recovery manager for Celsius's bankruptcy estate, representing Celsius and some former clients in asserting claims. Chainalysis declined to comment to Cointelegraph.

The core of the case revolves around a $3.3 billion "audit." In 2020, Celsius used Chainalysis's Reactor software to calculate the scale of its managed assets and publicly announced the results as an audit. According to the complaint outlined by the court, a Celsius executive initially calculated approximately $1.18 billion in assets using Reactor, but after adjusting the methodology, that figure rose to approximately $3.3 billion.