An Irishman in danger of losing his farm. An American contemplating suicide. The lost life savings of an 84-year-old widow: People caught up in crypto lender Celsius meltdown are reclaiming their money.
Hundreds of letters have been sent to the judge overseeing the company’s multibillion-dollar bankruptcy, and they are heavy with anger, shame, desperation and often regret.
“I knew there were risks,” said one customer whose letter was unsigned. “It seemed like a worthwhile risk.”
Celsius and its CEO, Alex Mashinsky, had billed the platform as a safe place for people to deposit their cryptocurrencies at high interest rates, while the firm lent and invested those deposits.
But as the value of highly volatile cryptocurrencies plummeted — Bitcoin alone is down over 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 filing earlier this month, and the endgame is unclear.
The letters – posted to an online public court record – come from around the world and tell of the tragic consequences of freezing user funds.
“From this hard-working single mom in Texas struggling with overdue bills, to the teacher in India who deposited all his hard-earned money in Celsius — I think I can speak for most of us when I say that I feel betrayed. embarrassed, depressed, angry,” wrote one client who signed his letter to EL
While the letters vary in their level of sophistication about the crypto world — from self-confessed novices to all-in evangelists — and the monetary impact ranges from a few hundred dollars to seven figures, almost everyone agrees on one thing.
“I’ve been a loyal Celsius customer since 2019 and I feel completely lied to Alex Mashinsky,” wrote one customer, whom AFP does not identify to protect their 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, which presented itself as stable until days before the user funds freeze.
– Repeated assurances before the fall –
“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 made it through crypto downturns before (this is our fourth!). Celsius is prepared,” the company wrote.
The message also said the company had the reserves to meet its obligations and withdrawals would be processed as usual.
One customer who reported locking $32,000 in crypto at Celsius noticed the impact.
“The private investor received security right up to the end,” wrote the client to the judge.
But that quickly changed, and on June 12, Celsius announced the freeze: “We are taking this action today to better enable Celsius to meet its withdrawal obligations over time.”
Some customers got the news in a message from the company.
“By the time I finished the email I had collapsed on the floor with my head in my hands fighting back tears,” wrote a 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 on a government loan with Celsius, said they had considered killing themselves.
Others reported intense stress, lack of sleep, and deep feelings of shame at having invested their retirement savings or their kids’ college money in a platform that was far riskier than they thought.
“As a private, unregulated company, Celsius is not subject to any disclosure requirements,” the Washington Post summarized the situation.
Celsius did not respond to a request for comment on the letters from customers.
For people like an 84-year-old woman who only had about $30,000 in crypto savings on Celsius for a month, her hope lies in the bankruptcy proceedings.
“It’s just not uncommon for people to come out of something like this with zero,” said Don Coker, a banking and finance expert.
“Obviously I feel sorry for anyone who loses an investment like this, but it’s just something where you have to be aware of the risks,” he said.
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