Cryptocurrency clients beg for their cash back after lender collapse

Washington, USA – An Irishman is at risk of losing his farm. An American has suicidal thoughts. An 84-year-old widow loses her life savings: People caught up in the Celsius crypto bank meltdown are demanding their money back.

Hundreds of letters poured into the judge overseeing the company’s multibillion-dollar bankruptcy filled with anger, shame, despair and, often, regret.

“I knew there were risks,” said a client whose letter was not signed. “It seemed a worthwhile risk.”

Celsius and CEO Alex Mashinsky have described the platform as a safe place for people to deposit their cryptocurrency at a high interest rate, while the company has lent and invested in those deposits.

But with the value of the highly volatile cryptocurrency plummeting — bitcoin alone has fallen more than 60 percent since November — the company faced growing problems until it froze withdrawals in mid-June.

The company owed $4.7 billion to its users, according to a court filing earlier this month, and the endgame is not clear.

The messages – which are posted in an online public court registry – come from all over the world and recount the tragic consequences of freezing users’ funds.

From that hard-working single mother in Texas struggling to pay outstanding bills, to the teacher in India with all his hard-earned money deposited in Celsius—I think I can speak for most of us when I say I feel betrayed, ashamed, Depressed, angry,” one customer who signed his letter EL . wrote

While letters vary in their level of sophistication around the crypto world — from self-confessed novices to evangelists — and financial impacts range from a few hundred dollars to seven-digit amounts, nearly everyone agrees on one thing.

“I’ve been a loyal Celsius customer since 2019 and feel Alex Mashinsky utterly lied to him,” wrote one customer, who was not identified by AFP to protect his privacy. “Alex was talking about how the percentile is safer than the banks.”

Several messages point to the CEO’s AMA (Ask Mashinsky Anything) online conversations as key to their trust in him and the platform, which presented themselves as stable until days before users’ funds froze.

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

We’ve been through crypto downturns before (this is our fourth drop!).

The letter also said the company has reserves to pay its obligations, and withdrawals are processed as normal.

One customer, who reported $32,000 worth of cryptocurrency locked in Celsius, noted the effect.

“Until the end, the retail investor received a guarantee,” the client wrote to the judge.

But that quickly changed, and on June 12, he announced the freeze: “We are taking this action today to put CPC in a better position to meet its withdrawal commitments over time.”

Some customers got the news in a letter from the company.

“By the time I finished sending the email, I had collapsed to the floor with my head in my hands and held back my tears,” wrote a man with assets of about $50,000 with a degree Celsius.

Clients who said they were hit the hardest, including a man who said he put $525,000 he took from a government loan on a C, revealed they had considered killing themselves.

Others reported extreme stress, lack of sleep, and feelings of extreme shame to put their retirement savings or their children’s college money into a platform that was more risky than they knew.

“As an unregulated private company, Celsius is not subject to any disclosure requirement,” the Washington Post summed up the situation.

Celsius did not respond to a request for comment on customer messages.

For people like the 84-year-old who only had nearly $30,000 in cryptocurrency savings for a month, their hope lies in bankruptcy proceedings.

“It’s not uncommon for people to come out of something like this with a zero,” said Don Cocker, an expert on banking and finance.

“I obviously feel sorry for anyone losing an investment like this, but it’s just something they need to be aware of,” he said.

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