Crypto: The Celsius Platform Bankruptcy Despairs Its 1.7 Million Customers

An Irishman about to lose his farm, an American with suicidal thoughts, an 84-year-old widow who has lost all her savings: the customers of the cryptocurrency investment platform Celsius are desperate.

Since the company filed for bankruptcy in mid-July, hundreds of letters from former users have come to court filled with anger, shame and often regret. ” I knew there were risks “says a client, for example, who has not signed his testimony. ” It seemed worth it “.

Celsius was one of the main players in this sector, which lends money and reimburses deposits, playing on the banks’ territory without offering the same guarantees. The platform offered interest rates above 18% for savers, but 0.1% for borrowers. In June, it had 1.7 million customers.

But in light of the cryptocurrency slump – bitcoin has lost more than 60% since November – several companies have frozen withdrawals and/or filed for bankruptcy in the US.

“Betrayed, ashamed, depressed and angry”

From the single mom from Texas who works hard and struggles to pay her bills, to the Indian teacher who puts her hard-earned money on Celsius – I think I speak for everyone when I say I feel betrayed, ashamed, depressed and angry. “, wrote “EL”, a customer.

Celsius and its boss, Alex Mashinsky, had assured that the platform was a safe place to deposit its cryptocurrencies. It now owes $4.7 billion to its customers.

Their letters, accessible in the court’s public database, often tell of dramatic consequences, whether the loss is hundreds or millions of dollars. They come from all over the world, from inexperienced crypto enthusiasts to evangelists of these new assets. They almost all agree on one point: their trust has been violated.

Alex Mashinsky completely lied to me said one of them, who describes himself as ” a loyal customer of Celsius since 2019 “.” Alex said Celsius was safer than banks he added.

One of the clients is an 84-year-old woman, who decided to put her $30,000 in cryptocurrency savings on Celsius a month before the recording freeze.

“I fell to the ground, my head in my hands”

On June 7, Celsius again boasted “ to have one of the best risk management teams in the world “.” We’ve been through other crypto dips before (this is our fourth!). Celsius is ready the company said. She claimed to have the reserves to pay her obligations. Withdrawals worked normally.

But everything changed on June 12, when she announced the freeze. Without it, she then explains, the recordings would have been ” accelerated », allow « getting some customers – the first to act – fully reimbursed, leaving others to wait It’s a matter, she promises, of restructuring to… maximize value for all stakeholders “.

Some customers will then receive a message from the company. ” When I finished reading the email, I fell to the floor, my head in my hands, trying to hold back my tears. says a man who had about $50,000 in assets stored at Celsius.

Customers who say they are being hit harder, including one who claims to have placed $525,000 on a government loan, say they are considering suicide.

Others talk about stress, sleep deprivation and their deep shame for risking their savings or their money to pay for their children’s education.

No or few guarantees for customers

As a private company, in an unregulated industry, Celsius had few obligations. ” The majority of these companies provided loans without collateral or with insufficient collateral says Antoni Trenchev, co-founder of Nexo, another crypto platform that he believes got away with a stricter lending policy and a “ prudent risk management “.

Victims hope that the court hearing the bankruptcy process will help them get at least some of their money back. It can take years.

Of course I feel sorry for all those who lost their money this way Don Coker, a legal expert on banking and finance, told AFP. ” But this is one area where they need to be aware of the risks “.

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