An Irishman is in danger of losing his farm. An American with suicidal thoughts. 84-year-old widow loses life savings: People caught up in crypto lender Celsius’ meltdown are begging for their money back.
Hundreds of letters have been submitted to the judge overseeing the company’s multibillion-dollar bankruptcy and are heavy with anger, shame, despair and regret.
“I knew there were risks,” said the client, whose letter was not signed. “It seemed like a worthwhile risk.”
Celsius and the company’s CEO, Alex Mashinsky, have touted the platform as a safe place for people to deposit their cryptocurrencies in exchange for high interest, and the company withdraws and invests those deposits.
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But as the price of highly volatile cryptocurrencies plummeted — bitcoin alone has fallen more than 60 percent since November — the firm faced major problems until it cut cash withdrawals in mid-June.
According to a court filing earlier this month, the company owes its consumers $4.7 billion, and the end game is unclear.
The letters, posted on the court’s official docket online, come from around the world and recount the tragic consequences of users’ funds being blocked.
“From that hard-working mom struggling with past due bills in Texas, to the teacher in India who saved all her hard-earned money in Celsius, I believe I can speak for many of us when I say that I was betrayed, ashamed. Wrote one customer who signed their letter to L.
While the letters vary in their level of sophistication about the world of crypto, from self-confessed novices to all-out evangelists, and the financial results range from a few hundred dollars to seven-figure sums, they almost all agree on one thing.
“I have been a loyal Celsius customer since 2019 and I feel like I was lied to by Alex Mashinsky,” wrote one customer. AFP It will not be identified to protect its privacy. “Alex Celsius talks about being safer than a bank.”
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, as he presented himself as calm before deducting user funds.
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“Celsius is one of the best risk management teams in the world. Our security team and infrastructure are second to none,” the firm wrote on June 7.
“We’ve been through crypto downturns before (this is our fourth!) Celsius is ready,” he wrote.
The message stated that the company had sufficient reserves to meet its obligations, and withdrawals were being made as usual.
One customer who reported locking up $32,000 in Crypto in Celsius noticed the results.
“Until the end, the retail investor was guaranteed,” the client wrote to the judge.
But that quickly changed, and on June 12 Celsius announced it was stopping: “We are taking this action today to better position Celsius to comply with its phase-out obligations.”
Some customers got the news through a message from the company.
“When I finished the email, I fell to the floor with my head in my hands and fought back tears,” wrote the man, who was worth about $50,000.
Clients who say they are the worst victims, including a man who says he put $525,000 in a government loan on Celsius, have said they were suicidal.
Others reported severe anxiety, sleeplessness, and deep shame about putting their retirement savings or their children’s college money into a more dangerous arena than they knew.
“As a privately held company, Celsius is subject to no requirements for transparency.” The Washington Post He summed up the situation.
Celsius did not respond to a request for comment on the customer letter.
For people like an 84-year-old woman who had about $30,000 in crypto savings for a month in Celsius, their hopes are on bankruptcy proceedings.
“It’s not unusual for people to come out of something like this with zero,” said Don Coker, an expert on banking and finance.
“Of course, I feel sorry for anyone who loses an investment like this, but it’s one thing they should be aware of,” he said.