Crypto consumers plead for their cash following lender’s collapse. A farmer in Ireland who risks losing his farm. A U.S. citizen with suicidal inclinations. An 84-year-old widow’s life savings were lost: People affected by the collapse of cryptocurrency lender Celsius are asking for their funds.
Hundreds of angry, ashamed, despondent, and usually regretful letters have been sent to the judge managing the multibillion-dollar bankruptcy of the company.
A client whose letter was unsigned stated, “I was aware of the hazards” It appeared to be a worthwhile gamble.
Celsius and its CEO Alex Mashinsky had marketed the platform as a secure location for users to store their crypto assets in return for a high-interest rate, while the company loaned and invested the deposits.
But when the value of extremely volatile cryptocurrencies plunged – bitcoin alone has lost almost 60 per cent since November – the company encountered escalating difficulties until mid-June when it banned withdrawals.
According to a court filing from earlier this month, the corporation owes $4.7 billion to its subscribers, and the outcome remains uncertain.
The letters – which were submitted to a public online court docket – are from all across the world and detail the catastrophic consequences of customers’ funds being blocked.
I believe I can speak for the majority of us when I say that I feel deceived, humiliated, unhappy, and furious.
While the letters differ in their level of crypto-world expertise—from self-proclaimed amateurs to all-in zealots—and the financial consequences range from a few hundred dollars to seven-figure sums, virtually all agree on one point.
Numerous letters cite the CEO’s AMA (Ask Mashinsky Anything) online conversations as the reason for their trust in him and the site, which appeared solid until days before it froze user cash.
Infrastructure is unparalleled
“Celsius boasts one of the world’s top risk management teams.” Our security staff and infrastructure are unparalleled “The company commented on June 7
“We have survived previous crypto bear markets (this is our fourth!). Celsius is ready for use, “The company wrote.
In addition, the notification said that the firm had sufficient funds to meet its commitments and that withdrawals were being handled as usual.
One customer, who claimed to have $32,000 in cryptocurrency locked up at Celsius, remarked on the impact.
“The retail investor received assurances to the very end,” the client wrote to the judge.
But this swiftly changed, and on June 12 Celsius announced the freeze: “We are taking this move now to best position Celsius to meet its withdrawal commitments over time.”
Some clients were informed via a company-sent communication.
“By the time I completed the e-mail, I was on the floor with my head in my hands and fighting back tears,” a guy with around $50,000 in assets with Celsius wrote.
Severely damaged clients
The clients who stated they were severely damaged, including a guy who said he placed $525,000 he received through a government loan on Celsius, revealed they had contemplated suicide.
Others described intense anxiety, sleep deprivation, and feelings of profound humiliation as a result of investing their retirement assets or their children’s education funds on a platform that was far riskier than they had realised.
The Washington Post described the issue as follows: “As a private, unregulated corporation, Celsius is exempt from any disclosure requirements.”
Celsius did not respond to a request for comment about the customers’ letters.
For individuals like an 84-year-old lady who only had her about $30,000 in crypto savings on Celsius for a month, the bankruptcy procedures are their last hope.
Don Coker, an expert witness in banking and finance, stated, “It’s not uncommon for people to emerge from a situation like this with nothing.”
“Of course, I feel bad for anyone who loses a similar investment, but they should be aware of the hazards,” he added.