Celsius clients write pleas to bankruptcy court to get the crypto back: “It’s an emergency, just to keep a roof over my family and food on their table.”

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Some clients of the Celsius Network crypto lender, which filed for bankruptcy earlier this month, wrote to the bankruptcy court for the Southern District of New York, hoping to get their funds back.

As digital assets plummeted, Celsius, which said it had more than 1.7 million users in June, has halted withdrawals since June 12. The crypto lender allowed consumers to buy, borrow or deposit their cryptocurrencies and earn interest of up to 18.6% per year. Most “high yield” US dollar savings accounts offer annual percentage returns close to 1% or less, according to Bankrate.

Celsius has a hole of about $1.2 billion in its balance sheets, according to bankruptcy filings. It had total liabilities of $5.5 billion as of July 13, including more than $4.7 billion owed to Celsius users. The company had $4.3 billion in total assets, according to a filing.

In the bankruptcy filings, Celsius noted that its customers had transferred ownership of their crypto to the company, a move experts say could potentially hint at its plans to ask its users to be treated as unsecured creditors in the bankruptcy process.

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In letters to bankruptcy court, many Celsius customers said they felt cheated by the company and by Alex Mashinsky, its chief executive. “Every AMA (Ask Me Anything) Friday on YouTube, Celsius kept telling people they were better than a bank. Safer, with better returns. Besides telling us they had billions in cash,” wrote Brian Kasper, one of the platform’s clients.

“I’ve watched every AMA every Friday since I signed up, and week after week Alex was talking about how Celsius is safer than the banks because they’re not supposed to remortgage and use fractional reserve loans like they do. banks,” wrote Stephen Richardson. in a letter to the court. He described himself as a Celsius customer since 2019, with over six figures of crypto on the platform.

“I am embarrassed, ashamed and disgusted by the complete lack of transparency from a company claiming to be ‘open book’ and highly transparent to all banks,” Richardson wrote.

Celsius did not respond to an email seeking comment. Mashinsky did not immediately respond to a request for comment.

A social media thread on Reddit appeared about a week ago showing how Celsius customers can contact the bankruptcy court and the trustee. It is unclear whether the posting was a catalyst for individual letters to court.

Flori Ohm, a single mother of two daughters who will be entering college next year, wrote in another letter: “My family and I are severely impacted both financially and mentally by the bankruptcy. and locked cryptos. I always check the app if my cryptos are still there. I can not concentrate [on] my work or my sleep.

“I supported my parents and daughters on my own during [my] all the life. I struggle hard [to make a] alive,” she wrote.

Stephen Bralver, another Celsius client, said he had less than $1,000 left in a Wells Fargo checking account to support his family after Celsius froze all withdrawals. Bralver called for a release of its funds with Celsius, saying “this is an EMERGENCY, just to keep a roof over my family and food on their table.”

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In a letter filed on July 21, Sean Moran, an Irish resident, wrote that he had lost his farm and his family had been left homeless due to Celsius’ bankruptcy. “The family is overwhelmed by my decisions to trust Celsius and promise them a better future,” he wrote.

Still, Celsius’ bankruptcy hasn’t shaken some crypto investors’ confidence in the rather fledgling asset class. “I still have full confidence in crypto, but I have no confidence in Celsius’s management with the current team,” wrote client Brad Ungar, in his letter to the bankruptcy court.

“I would sincerely ask you to let all Celsius depositors withdraw their cryptocurrency 100%, rather than converting our claims to dollars on a fixed date,” Ohm wrote.

In a presentation published by Celsius on its bankruptcy website, the company said it intended to give customers the option, “at the customer’s option, to get money back with a discount or stay.” long “crypto”.

Bitcoin, the world’s largest cryptocurrency, was down 2.6% on Monday at around $22,153, and more than 67% from its peak, according to data from CoinDesk. Stocks mostly advanced on Monday, with the Dow Jones Industrial Average DJIA,
-0.48%
gains 0.3% and the S&P 500 SPX index,
-0.70%
rising by 0.1%.

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