Celsius cryptocurrency customers are desperate – Today 24

Clients of crypto lending platform Celsius are in despair as an Irishman nearly loses his farm, an American contemplates suicide, and an 84-year-old widow says she has lost all her savings.

Since the company filed for bankruptcy in mid-July, the court has received hundreds of letters from former users filled with anger, shame and often remorse.

“I knew there were risks,” says an anonymous agent. But the investment seemed worth the risk.”

This platform was among the most important in this sector, which lends money, clears deposits and plays the role of banks, but without giving the same guarantees.

The platform was paying interest rates of more than 18% to savers and 0.1% to borrowers. In June, it had 1.7 million customers.

But in the face of the huge cryptocurrency downturn – Bitcoin has lost more than 60% since November – many companies have frozen withdrawals or filed for bankruptcy in the US.

EL, one of the clients, wrote: “From a working single mom in Texas struggling to pay her bills to an Indian teacher sweating his hard earned money on this platform, I think I speak for everyone when I say I feel betrayed, embarrassed, depressed and angry. Alex Mashinsky said it was a safe place to deposit his cryptocurrency. He now owes $4.7 billion to his clients.

His letters, which can be found in the court’s public database, often recount dire consequences, whether the loss is in the hundreds or millions of dollars.

Platform customers from all over the world, from inexperienced crypto enthusiasts to promoters of these new assets, but they all agree on a point where their trust has been lost.

Describing himself as a “loyal customer since 2019,” one said, “Alex Mashinsky lied to me.” “Alex said Celsius is safer than banks,” he added.

He claimed to have the reserve to pay his obligations. Withdrawals were proceeding normally.

But everything turned upside down on June 12 when the company announced its freeze.

Without this, he explained, withdrawals would have been “speeded up” allowing “some customers, first movers, to get their full funds while others have to wait.”

He said he would go through a restructuring process “to get the most money to compensate all customers.”

Some customers received a letter from the company.

“When I finished reading the email, I collapsed trying to hold back tears,” said a man with assets in the company estimated at $50,000.

There are clients who have suffered even greater damage and someone claims to have borrowed $525,000 from the government and is contemplating suicide.

Others speak of stress, anxiety and embarrassment at risking their savings or the money intended to pay for their children’s college expenses.

As a private company in an unregulated sector, Celsius did not have many obligations to fulfill.

“Most of these companies made unsecured or under-collateralized loans,” says Anthony Trenchev, co-founder of Nexo on another crypto platform.

He says that his company has been able to continue its activities thanks to a stricter credit policy and “prudent risk management”.

One client is an 84-year-old woman who decided to allocate $30,000 of her crypto savings to Celsius a month before withdrawals were frozen.

Victims hope that the court that deals with bankruptcy proceedings will help them recover at least part of their money. It can take years.

“Of course I feel sorry for everyone who lost their money in this way,” Don Cocker, a legal expert in banking and finance, told AFP. But they know it’s a risky field.”