Credit firm Crypto Celsius is taking its toll on customers, as clients write letters to judge asking for their money back
The Celsius debacle in the stock market crash
Celsius, a crypto lending platform, was a big part of the industry as many customers used their assets to deposit with the company. The crypto credit company promised customers high interest rates, prompting investors to deposit their holdings in Celsius. Celsius, as part of its operations, invests these deposits in other funds and companies and uses them to earn interest. When the stock market crash happened in May, many cryptocurrency institutions found themselves in the soup. Celsius was one of them.
Celsius had also loaned a large portion of the deposits to Three AC, a hedge fund company. When the hedge fund company collapsed, the Celsius debacle began. The company first froze investors’ accounts, prohibiting them from withdrawing their funds. The company has also hired restructuring lawyers to help the company restructure and get out of the soup. Even this move seems to have failed. After several attempts, the crypto credit company filed for bankruptcy. As the company filed for bankruptcy, many of the company’s customers erupted and began writing about their experience with the company, asking the judge to look into the matters more carefully.
Anger, anguish, anxiety, the three A’s common to clients.
Hundreds of letters began pouring in from clients to the judge, who was tasked with overseeing Celsius’s bankruptcy filings. The letters were filled with people’s experience of anger, anguish and anxiety. According to the court filing, the company owed approximately $4.7 billion to its customers and users.
There were clients of different age groups, financial conditions and many different variables suffering from the three A’s mentioned above. The letters revealed many examples of the pain the clients faced. Some of the examples are, like a single mother struggling with unpaid bills in Texas, an Indian teacher losing her hard-earned savings and many such examples have concluded the pathetic condition of clients.
Many letters were addressed to the CEO’s AMA (Ask Mashinsky Anything), which was held online, days before the accounts were frozen. The campaign was basically to keep customers in a good space and make them believe that the business was not in danger.
As we read more and more of people’s experiences of losing their assets and suffering, it’s hard to stomach the fact that a major crypto institution didn’t have the right measures in place to refund investments in the event of debacle. Some of the clients went as far as depression, where they planned to kill themselves, which is surely one of the most undesirable implications that Celsius wants right now.