Crypto clients beg for their cash back after lender Celsius’ crash – Tech

An Irishman in danger of losing his farm. An American with suicidal thoughts. An 84-year-old widow’s savings: People caught up in the collapse of cryptocurrency lender Celsius are begging for their money back.

Hundreds of letters have come in to the judge overseeing the company’s multibillion-dollar bankruptcy and they have been filled with anger, shame, despair and, often, regret.

“I knew there were risks,” said one client whose letter was unsigned. “It seemed like a valuable risk.”

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

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 its users $4.7 billion, according to a court filed earlier this month, and the endgame is unclear.

The letters – posted to a public online court – come from all over the world and tell of the tragic consequences of users’ funds frozen.

“From that hard-working single mom in Texas struggling with delinquent bills, to the teacher in India with all his hard-earned money deposited in Celsius – I believe I can speak for most of us when I say I feel betrayed, ashamed, depressed, angry,” wrote one client who signed their letter EL.

Also read: Small players lose faith in crypto after sell-off

While the letters vary in their level of sophistication about the crypto world — from self-proclaimed novices to all-in evangelists — and the financial ramifications range from a few hundred dollars to seven-figure sums, nearly all agree on one thing.

“I have been a loyal Celsius customer since 2019 and feel completely lied to Alex Mashinsky,” wrote one customer who AFP does not identify himself to protect his 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 confidence in him and the platform, presenting itself as stable until days before users’ money froze.

Repeated Fall Guarantees

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

“We’ve endured crypto downturns before (this is our fourth!). Celsius is prepared,” the company wrote.

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

One customer, who reported having locked up $32,000 in crypto with Celsius, noted the impact.

“Until the end, the private investor was given 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 withdrawal commitments over time.” Some customers got the news in a message from the company.

“By the time I finished the email, I had fallen to the floor with my head in my hands, fighting back tears,” wrote one man who had about $50,000 in assets at Celsius.

The customers who said they were hardest hit, including a man who said he placed $525,000 he received from a government loan on Celsius, revealed that they had considered committing suicide.

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

“As a privately held unregulated company, Celsius is not subject to any disclosure obligation,” the Washington Post summed up.

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

For people like an 84-year-old woman, who had about $30,000 in Celsius crypto savings for just a month, their hopes lie in bankruptcy proceedings.

“It’s just not uncommon for people to come out with zero,” said Don Coker, a banking and finance expert witness.

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

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