Crypto Lender Celsius Bankruptcy Devastats Customers


An Irishman at risk of losing his farm. An American who has suicidal thoughts. An 84-year-old widow’s lost life savings: People caught up in the collapse of crypto lender Celsius are begging for their money back.

Hundreds of letters have reached the judge overseeing the company’s multi-million dollar bankruptcy and they are filled with anger, shame, despair and regret.

“I knew there were risks,” said a customer whose letter was not signed. “It seemed like a risk worth taking.”

Celsius and its CEO, Alex Mashinsky, had pitched the platform as a safe place for people to deposit their cryptocurrencies for high interest, while the company lent and invested those deposits.

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But as the value of highly volatile cryptocurrencies plummeted (bitcoin alone has lost more than 60 percent since November), the company faced mounting problems until it froze withdrawals in mid-June.

The company owed $4.7 billion to its users, according to a court filing earlier this month, and the end game is unclear.

Letters posted in a public online court file come from around the world and recount the tragic results of freezing users’ money.

“From that working single mom in Texas struggling with overdue bills, to the teacher in India with all his hard-earned money deposited in degrees Celsius, I think I can speak for most of us when I say I feel betrayed, embarrassed. , depressed, angry,” wrote a customer who signed his letter EL

While the lyrics vary in their level of sophistication about the world of cryptocurrencies, from self-confessed newbies to hardcore evangelists, and monetary impacts range from a few hundred dollars to seven-figure sums, almost everyone agrees on one thing.

“I have been a loyal Celsius customer since 2019 and feel completely cheated by Alex Mashinsky,” wrote one customer who AFP is not identified to protect your privacy. “Alex would talk about how Celsius is safer than banks.”

Many of the letters point to the CEO’s AMA (Ask Mashinsky Anything) online chats as key to their trust in him and the platform, which was presented as stable until days before freezing user funds.

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“Celsius has one of the best risk management teams in the world. Our security and infrastructure team are second to none,” the firm wrote on June 7.

“We have weathered crypto downturns before (this is our fourth!). Celsius is prepared,” the firm wrote.

The message also said that the company had the reserves to pay its obligations and that withdrawals were being processed as normal.

One client, who reported having $32,000 worth of cryptocurrency locked up in Celsius, noted the impact.

“Until the end, the retail investor received security,” the client wrote to the judge.

But that quickly changed, and on June 12 Celsius announced the freeze: “We are taking this action today to put Celsius in a better position to meet its retirement obligations over time.”

Some customers received the news in a message from the company.

“By the time I finished the email, I had collapsed on the floor with my head in my hands and fought back tears,” wrote a man who had around $50,000 in assets with Celsius.

Customers who said they were the hardest hit, including a man who said he put $525,000 he got from a government loan into Celsius, revealed they had considered suicide.

Others reported a lot of stress, lack of sleep and feelings of deep shame for putting their retirement savings or their children’s college money on a platform that was much riskier than they thought.

“As a private, unregulated company, Celsius is not subject to any disclosure requirements,” here’s how Washington Post summed up the situation.

Celsius did not respond to a request for comment on the customer letters.

For people like an 84-year-old woman, who only had about $30,000 in crypto savings in Celsius for a month, her hope is in the bankruptcy process.

“It’s just not unusual for people to get away with nothing like this,” said Don Coker, an expert witness in banking and finance.

“Obviously, I feel sorry for anyone who loses an investment like this, but it’s something where you need to be aware of the risks,” he said.


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