Retail investors claim the fallout from the cryptocurrency lender’s collapse “severely impacted” them after Celsius customers were informed of an email breach
It appears that Celsius has been emailing consumers to let them know that a list of customer emails may have been sent to a third party. According to the email, it happened after one of Celsius’s vendors’ employees had seen the list. Even though the cryptocurrency lender Celsius claims that “we do not believe the event to create any substantial threats to our clients whose email addresses may have been impacted,” the news quickly became a hot topic on social media. Of course, the news was widely disseminated on Twitter, Facebook, and Reddit by several members of the crypto community.
It has happened before that data belonging to Celsius consumers has been compromised. In April 2021, Celsius stated that “an unnamed source has contacted several Celsius consumers via unauthorised routes.” According to sources at the time, phishing attacks were being used to attract Celsius consumers. Following the company’s filing for bankruptcy on July 13, when it “filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York,” the most recent information regarding the Celsius email leak has emerged.
Following the company’s departure and halt in operations on June 12 at 10:10 p.m., a bankruptcy petition was filed (ET). Celsius declared that it had stopped “all withdrawals, swaps, and transfers between accounts” at that moment.
Regarding the bankruptcy proceedings, Celsius customers have sent letters to the court requesting to recover their cryptocurrency holdings more quickly than the standard Chapter 11 bankruptcy creditors’ process. One client, a single mother of two girls, claimed that the situation had a significant influence on her family’s way of life.
“The bankruptcy and the locked-up cryptos have had a significant negative impact on my family and me in terms of finances and mental health. I often check the app to see whether my cryptos have not been lost. In her letter to the bankruptcy court, the lady said, “I can’t concentrate on my work or sleep.” Prior to filing for bankruptcy, Celsius stated that company had over 1.7 million clients.
Another Celsius consumer said that the insolvency of the cryptocurrency lender severely harmed his financial situation and that he had less than $1,000 in his Wells Fargo bank account. The client emphasized:
One Celsius user claims to still have “full faith” in cryptocurrencies
The client wants the authorities to release the money and distribute the cryptocurrency to retail customers, as do several other clients who sent petitions to the bankruptcy court on their behalf. In addition to the bankruptcy and the letters from the clients, the crypto lender is now being sued by Jason Stone, the creator of Keyfi and a former partner.
Even if the cryptocurrency lender itself was untrustworthy, several Celsius investors observed that they still trusted the crypto ecosystem despite the customer letters’ pleading with the court to release monies. Another Celsius customer wrote to the court, “I still have complete trust in cryptocurrency, but I do not have faith in the administration of Celsius with the current staff.
The majority of them are likely aware that waiting for creditor distribution in a bankruptcy case may be time-consuming, difficult, and frequently fruitless. In addition, creditors must provide a “proof of claim” document to support their claims. Customers can file a creditor’s claim by visiting the website supplied by Celsius.