Bitcoin Forum

The cryptospace appears to be having a domino effect in insolvency after the collapse of Terra Luna. The rumors are presently saying that much of the liquidity in Defi comes from Celsius and also a big part of it is Justin Sun. I am scratching my head in laughter if this is reality or fud hehehe. In any case, yes Celsius appears to have held UST and deposited them in Anchor to get 20% yields. They might have taken a large loss in that. 3 Arrows Capital and other billion dollar cryptofunds might also have money frozen in Celsius.

However, this is not the big news. There are some who speculate that the Ethereum Foundation has deposited funds in Celsius. There is a transaction hash some have said but I have not seen it. It might only be fud.



Crypto lender Celsius has hired lawyers from Akin Gump Strauss Hauer & Feld LLP as it mulls its financial options after halting withdrawals this past weekend, according to the Wall Street Journal.

Restructuring lawyers have been tapped from the law firm as it mulls what to do after freezing withdrawals, account transfers and swaps. Celsius cited "extreme market conditions" in its announcement at the time.

The Wall Street Journal report said that Celsius "is first looking for possible financing options from investors but is also exploring other strategic alternatives, including a financial restructuring," according to a source with knowledge of the process.

Read in full https://www.theblock.co/linked/152084/crypto-lender-celsius-mulls-possible-restructuring-amid-financial-woes-wsj

20% yields...

Who in the right mind would think that was legit? Anyone with a half brain should be able to see the ponzi scheme behind it. If you can't and "invested" money in any of these ponzi schemes, then you deserved to lose your money. TerraLuna was the first, and it looks like this will be the second domino.

Rising USD interest rates will make the things even worse because more people will want to withdraw their money from these projects and give it to the banks.

Celsius has to call a spade a spade. What is happening right now is like a bank run. The company isn't just mulling possible restructuring; it is definitely compelled to do some restructuring because it doesn't have a choice. It is falling. It is dying. It is fast losing liquidity. Celsius can't absorb all these big and panic withdrawals. And these revelations--including the withdrawal freeze--although right and good, are not helping. They only make many of their clients more fearful and therefore withdraw, thereby causing more drains from the company.

I really don't believe they're THAT stupid. I farmed the 20% yield on Anchor as well (fully knowing it was unsustainable) but I planned ahead — if UST we're to drop ever so slightly and the Curve AMM pools became unbalanced, I'm immediately going to 100% go out. I'm going to assume that they had the same plan, and that they were just slow.

..or maybe they are stupid.

@mk4. I am very much in doubt if they were stupid. It might be some of them, however, there were also whales and major cryptofunds that had deposits of UST in Anchor. It is very clear that it was not stupidity that caused their failure. It was greed.

Isn't this exactly what our hardcore brothers and sisters who still believe in Ponzi schemes do? Get in early knowing it's a risk business that could stop any time and then get out before things go south?  ;D

---

I will say this again here. Justin Sun is a big fraud and the cracks are starting to appear… It's just a matter of time before people realize.



This tweet (https://twitter.com/SchillerSmith/status/1536200364503904262) sums up the Celsius network and the Defi Ponzi schemes

How it started
https://talkimg.com/images/2023/07/19/Zq2qT.png

The current situation so far  ;D
https://talkimg.com/images/2023/07/19/ZqaGl.png

Preparing for a tsunami of lawsuits, perhaps? You can't promise people something, then you do the other thing while blocking their money.

Here we go - Regulators in Five States Target Celsius Over Withdrawal Freeze (https://decrypt.co/103096/regulators-five-states-target-celsius-withdrawal-freeze)

@logfiles. I predict that Justin Sun will come out of this cryptospace game richer and he will be a more important character than before. I am not telling everyone that he is the hero, however, he his a survivor. We have lost many characters. Mark Karpeles, Chris Larsen, Dan Larimer, Brad Garlinghouse and other old founders. Justin Sun might survive everything hehehehe. Did you know they presently call him his excellency? He is an ambassador of something now hehe. He might have legal immunity from any type of lawsuits.

In any case, it appears 3 Arrows Capital might have also become insolvent because of Celsius. They were speculated to have $18 billion under their management during the peak of the bull market. There are no news outlets presently reporting on this, however, there are already other founders in social media telling everyone what happened and what their business relationship was with 3 Arrows.



1) What happened between 3AC and us and what we know so far:
@zhusu @KyleLDavies

Source https://mobile.twitter.com/danny8bc/status/1537224378554806272



These are 3 Arrows Capital's investments in the cryptospace. They have many from Avalanche to Blockfi to Axie Infinity.

https://www.threearrowscap.com/select-investments/

There's a huge difference between "still believing in ponzi schemes", versus knowing that it will inevitably implode but that you could still make trades/moves and win in the end. :P (e.g. farming the yield, then getting out and shorting $LUNA)

LOL! But, well, it could happen. But it now depends on whether people in the crypto space would get enlightened or not. Justin Sun is a scheming young man who will remain who he is. He does what he does best. He will continue with his money-making business. He is good in building up hype around his projects. It's just up to the people whether they've learned from history or not. Justin Sun will always prey upon the innocent. But I admit he is better than Do Kwon. CZ must be a good mentor.

Things are not that simple as even smart people do stupid things when greed kicks in and that's what happened here. While Luna has ~20% APY, Celsius was more moderate in that regard (I think BTC had 8-9%) so people automatically assumed that its legit.


Unless his logarithmic stablecoin USDD ends up the same way UST as for the last four days it has issues staying pegged.


Lawsuits are inevitable at this point. Well known crypto YouTuber/Twitter influencer BiBboy Crypto who allegedly has millions of dollars locked in Celsius already announced that he is preparing the lawsuit and I am sure that many more are planning the same thing. It's just the beginning though as Texas securities regulators have opened investigation and probably other states will do it as well.

Celsius model business was solid.
You lend people money in crypto, you make them have 120% collateral, and you charge the ones you lend money to more than you charge people depositing.
Unlike banks you have no fear of people getting unemployed and not being able to pay, but you have no problems with the value of the collateral as you don't issue mortgages that might turn 1/4 of the value, and more important you have a lot of clients with bad credit interested in short loans, clients who would pay 10% of in a month to get the funds needed fast.

In many aspects, the business was solid, more solid than being a loan shark or a bank or a pawn shop, but their problem was they tried to get more and they started using the money that was supposed to cover swings in collateral (as rumors say) to farm yields in different schemes, basically, greed kicked in, and the results, well, suck. I don't have a penny in Celsius but I know guys who had, and I can't blame them, normally you shouldn't have had a problem with it, of course besides the usually hacks and "hacks".

The only problem is that with this business model they probably couldn't sustain that APY, so they had to do bunch of risky stuff which in the end backfired. Here is the good twitter thread that explains what they were doing with people's money  https://twitter.com/jonwu_/status/1536476104986267648


Yeah same here, I don't have anything in Celsius but I do know few IRL people that did/do have, and they are far from stupid or inexperienced. I was also considering putting something there but in the end I decided to pass as I didn't wanna bother with some smaller amounts like 1-2k USD and I didn't trust them enough to put enough money to get a solid yearly return.

I have never invested in any of these websites because their promises are far-fetched.
20% yearly ::) it's a stupid amount because it's 5-10 times much more of what you can get from the traditional bank system.

it is impossible to guarantee these profits without as much risk. it's clear that yes maybe these are good business model but they can't face a negative period or other circumstances as we have seen during these days.

I find it quite curious that these services that "do this for their job" have practically left these economic "big holes" behind them.

Yeah, this is where it went wrong!
If they could have been not that greedy they could have lowered their APY to economically feasible models, applying the traditional difference between loans and deposits and they could have made money without any risks. But, in their desire to attract customers they've raised those rates to unsustainable levels, just like the guy in the Twitter link mentioned, they were desperate to attract more money to invest more in their schemes until the volume was again unsustainable, you can't print all this money out of thin air, period!

Anyhow, the funny thing in that tweet:


I always said, the way things are going right now, reminds me of 1898, some enthusiasts who thought they could do things better tried to save the world from one broken system by replacing it with one that will prove to be even worse, but on paper it worked wonders. The same rhetoric, get rid of the 1%, get rid of banks, kill the kulaks, power to the people!!! But in reality, we end up with Terra and Celsius, among many others.

They call him His Excellency hehehe. How did he get to this position which is assumed to have legal immunity? This should be enough to tell everyone that Justin Sun might have a wealthy, powerful backer behind him. Is it CZ? No, I speculate CZ to be just one of the people of an exclusive group created to manipulate and the cryptospace. A crypto illuminati hehehehehe.

We can call him by any name, but the fact that people like him have very little (or not at all) scruples and sell their ideas very successfully (however pointless they may be). They all prosper and cooperate in a world where profit is the common denominator, where all boundaries and disagreements disappear. It’s easy to be a survivor when you always have enough money to live like a king, no matter what happens to the projects and companies you have.

---

As for these crypto-landers, in my opinion, they should never have existed, much less they should have been trusted. Many have said it was a bad idea in the past, and now we know they were right - and I wouldn't care that they fail, but their failure hurts us all. Will people learn anything from all this? I honestly don’t hope too much given the short-term memory that the average cryptocurrency investor shows.

I've lost track of just how many times I have warned people against these kinds of unsustainable returns over the past few years. And as I have also repeatedly (https://bitcointalk.org/index.php?topic=5315224.msg56289293#msg56289293) pointed (https://bitcointalk.org/index.php?topic=5369898.msg58387588#msg58387588) out (https://bitcointalk.org/index.php?topic=5378227.msg58819507#msg58819507), Celsius' terms of use were explicitly clear that your coins would be effectively gambled for their own profit and that you had absolutely zero protection if something was to go wrong. Now that it has gone wrong, there is essentially nothing users can do but to sit and cross their fingers that they might get some portion of their coins back again, but it seems unlikely.

This should be a very stark wake up call for anyone who is holding coins on any centralized exchange or platform, or locked in any ridiculous yield generators or other such nonsense. Celsius absolutely will not be the last service to go under and take all their users' deposits with them.

There always be the rich and powerful everywhere who tries to manipulate and takes advantage everything for profit. This is the reality of capitalism. Whether the name is Justin Sun, Changpeng Zhao, Sam Bankman Fried, Michael Saylor or Elon Musk, everyone like them is out there for profit.

In any case, it is speculated that Zhu Su moved 3 Arrow Capital to Dubai from Singapore to avoid extradition to America for financial crime. This will again be very bad for the image of the cryptospace.

It is not disputed that they are all in the crypto game because their ultimate goal is profit, but the way they will achieve it is important. I would not put Saylor on the same level as Musk, because the former has his own business philosophy and sticks to what he says from the first day he invested in Bitcoin, while the latter did a lot of damage with his tweets by pumping that altcoin, and even greater damage is made by his decision to withdraw Bitcoin as a payment option in one of his companies.


I read an article in which the SEC investigates Kwon, but they already admit that it will be difficult for them to prove that he intended to do something bad - even though he was extracting large amounts of money months before the collapse. I think that in this particular case it would be difficult to prove something, but if you have money and you are not completely stupid, you can at least temporarily evade justice.

Over bitcoin, Celsius was paying up to 8,53% annually (if receiving rewards in CEL token) or up to 6,50% (if receiving "in-kind" rewards). Moreover, rates could change from week to week, depending the market conditions and demands. The more borrowing demand there was for a currency, more interest they would pay to investors on that week. So the system was dynamic and constantly changing, what I consider really good for the sustainability of the platform. And yes, theoretically it could be legit, because the lending business is a profitable one.

The problem is what they have been doing on the backgrounds and don't share with the community they are constantly saying to be acting in the interest of as their main priority...

I'm one of the 1,7 million investors of the platform who injected over 5 billion dollars on their hands. Things aren't looking good, because there isn't transparency, the CEO has disappeared from social medias, all messages coming from them are evasive and say nothing enlightening, sock puppets accounts on twitter and reddit keep pushing an "us against them" narrative to protect Celsius, just like Mashinsky has always done and inexplicably CEL's price is doing well right now, pumping decently, what indicates the platform is burning investors' funds to boost their native token.

Anyway, they can't pull the rug without consequences. It's not an anonymous virtual investment scheme and there are too many people and too much money involved on it.

I honestly would like to see Saylor's investment in bitcoin to be an inspiring success story, however, I cannot stop myself from being skeptical. I speculate him to be more dangerous than Elon Musk, very much similar to those politicians who always make themselves appear good in front of the public or similar to those scammers who want themselves to appear honest.

I’m not overly thrilled with the way Bitcoin is used that way, and not as a currency as it should be - but Saylor firmly believes in what it does and hasn’t changed his mind even in moments when many have shown how hypocritical they really are. Musk has done great damage to Bitcoin with its acceptance and then withdrawal of the payment option, and I believe this has influenced many to have a negative view of Bitcoin as a currency because “transactions are dirty”.

Furthermore, if you look at just how much damage Celsius has done not only in terms of financial damage but also by throwing a negative light on Bitcoin, then Saylor is still on the positive side - and as far as politicians are concerned, their work is far dirtier than any mining and scams like are happening in the world of cryptocurrencies.

News update. It appears Goldman Sachs might bail out Celsius. This comes after some news that Blockfi will be bailed out by FTX. I predict those other big cryptolenders like Genesis and Voyager will also have their own bail outs from other cryptowhales and bankers. Changpeng Zhao, Justin Sun, Arthur Hayes and JPMorgan will be in the news hehehe.



Goldman Sachs is looking to raise $2 billion from investors to buy up distressed assets from troubled crypto lender Celsius, according to two people familiar with the matter.
The proposed deal would allow investors to buy up Celsius’ assets at potentially big discounts in the event of a bankruptcy filing, the people said.

Source https://www.coindesk.com/business/2022/06/24/goldman-sachs-raising-funds-to-buy-celsius-assets-sources/



Also, if everyone pays attention to the news, you would know who might have been talking to Goldman Sachs to bail out Celsius. The information exchange might be going back and forth between Goldman Sachs and FTX. This article is from April.



Goldman CEO David Solomon met with Sam Bankman-Fried in the Caribbean last month to discuss advisory services for FTX, new report says

Source https://markets.businessinsider.com/news/currencies/sam-bankman-fried-goldman-sachs-ceo-ftx-ipo-fund-raising-2022-4

Not at all, and it's in the article also, it's not a bailout it's a garage sale, not a helping hand but a pack of hyenas roaming around.



If we take May the 1st, then those assets, considering other coins have ump harder than bitcoin are only 6 billion, 2 billion losses for investors bets case scenario, worse maybe 4-5. If the assets were valued at 12B in middle may then maybe they will not go bankrupt at all, with only a few hundred million that they can solve by creating a new scheme, as it's the norma when it comes to them.

Hopefully, they have enough money to pay back the ones that lend them coins, it's really an ugly situation.

@stompix. Okay then it appears that speculations on Goldman Sachs and Sam Bankman Fried information exchange might really be true hehe. A similar comment in social media was made by someone that FTX is not saving Blockfi. Sam is only making Sam moves by taking over for the price of zero. This was not very shocking after knowing more about Sam.

I doubt it. Goldman Sachs will be buying up the assets at a huge discount. That $2 billion Celsius raise will then be used to pay off some of their debts to their investors. It any bankruptcy case, secured creditors come first. Secured creditors are all the financial institutions and venture capitalists which provided the bulk of Celsius' funding. That $2 billion will be entirely exhausted paying back these entities, with still a significant outstanding debt. Regular users are unsecured creditors, and will come last. I doubt any regular user will see even a single cent of this Goldman Sachs money. As I noted in another thread, highly ironic that Celsius' tagline was "Unbank yourself", and everyone who believed that is going to end up with all their coins in the possession of a fiat bank.

Not saving it, but buying it out. Turns out the $250 million bailout FTX offered was in exchange to be able to acquire BlockFi at essentially no cost and wipe out all their other shareholders. Morgan Creek Digital - one of BlockFi's shareholders who are facing losing everything - and now trying to put together their own bailout for BlockFi instead. Either way, if for some insane reason you still have funds on BlockFi, you should get them out now.

@ o_e_l_e_o. I only read the news now hehe. It appears Sam Bankman Fried's tactic to become the king of the cryptospace in the bear market is to make money by liquidating everyone through their market maker and cryptofund called Alameda Research then buy them out with the billions they made in liquidation profits hehehe.

It will not come as a shock if he also begins to go after those exchanges that might fail in America. Coinbase and Binance.us.

https://i.ibb.co/chDF3G7/ED4-CDEA3-61-D5-4-F01-9-CD5-23-EA4256-EB48.png

FTX’s $250 million credit facility offer – if inked as initially proposed – stood to effectively wipe out all BlockFi shareholders, including Morgan Creek Digital, the firm told its investors.

Morgan Creek Digital, co-founded by Anthony “Pomp” Pompliano, is one of BlockFi’s largest investors. The firm has participated in BlockFi’s Series A through D fundraising rounds across three funds and a special purpose vehicle (SPV), a type of investment structure that allows an investor to invest in a single company.

Source https://www.coindesk.com/business/2022/06/25/morgan-creek-is-trying-to-counter-ftxs-blockfi-bailout-leaked-call-shows/

FTX Passed on Deal to Purchase Celsius Due to Deficient Balance Sheet: Report (https://www.coindesk.com/business/2022/06/30/ftx-passed-on-deal-to-purchase-celsius-due-to-deficient-balance-sheet-report/)

Well, after this refusal, at least the public can finally have a clue of how bad things are inside Celsius. Is this 2$ billion loss recoverable?

I suppose if the platform was serious about getting back on track the first thing they should have done was to stop paying interest to customers. The fact they keep paying weekly interest on accounts while having a negative balance of 2$ billion dollars possibly means they are only buying time.

@uneng. There will be some companies in the cryptospace that cannot be saved. Also, there are some speculations that Celsius's CEO, Alex Mashinsky might have been dumping CEL tokens on the market.

Another head shaking information on Celsius is their head of institutional lending is Jessica Khater who is a former pornstar or someone who has done porn before working for Celsius.



Due to public revelations by Mr. Mashinsky, we uncovered a network of wallets that appears to be under his direct control. Some of these wallets were involved in the earliest transfers of CEL tokens. One of the wallets, as we have shown previously, was used by Mr. Mashinsky to participate in multiple ICO rugpulls. All told, these wallets have seen nearly 200 million CEL pass through them en route to various destinations. Alex Mashinsky owned at least 77 million CEL tokens in 2019. At least 19 million were sold either via the Liquid exchange or through decentralized exchanges (DEXs) like Uniswap. Alex was a major liquidity provider for CEL markets on DEXs using these wallets.

Source https://dirtybubblemedia.substack.com/p/hodl-for-thee-but-not-for-me

Their strategy is to recover the losses through pump and dump schemes using CEL token and altcoins in general. In other words: gambling with investors' funds.

Maybe if they tried to negotiate honestly and realistically with another companies, like NEXO proposed to do as soon as withdrawls were stopped, it would have a happy ending for everyone, instead of risking more funds to recover a huge amount of money.

Also, days ago some crypto influencers and enthusiasts said on twitter Machinsky attempted to flee from US to Israel, but was halted at the airport by authorities. I don't know if it's true, since nobody provided any proofs, while at same time Machinsky himself didn't deny anything and is offline from social medias for 15 days already.

Well, let's see how that goes. After his $485 million loan to Voyager not even two weeks ago, Voyager have now suspended all trading and withdrawals: https://www.investvoyager.com/blog/voyager-update-july-1-2022/

No doubt this will pan out the exact same way as it did for Celsius. A "temporary freeze" will drag on and on with little being said from Voyager, followed soon by word that FTX, Goldman Sachs, or some other institution is quietly preparing to buy out all their assets and their users will lose everything.

I wouldn't trust Nexo either right now. I wouldn't trust any centralized platform. If your coins aren't in your own wallet, then there is a high risk that very soon they will bought out by some fiat bank for pennies on the dollar and you will lose everything.

They are dropping like flies, if it weren't for so many people that are going to lose a ton of money this would have been real popcorn material.

Everyone can remember the Defi hype, the old banks were obsolete, they were still standing because the gubbermint was involved, fractional reserves, all that will change with the new model, decentralized finances, secure finances, no more scheme, everything will be public, it will be ...
Well, fast forward two years and it has turned into a pile of crap, and the only thing that keeps it meaning a larger fuckup than the 2007 crisis is that fortunately for us they didn't have that much money in the first place and they were playing with "only" a few billion


Me neither but I do hope they come out of this unscratched, I know guys that have money there, I have friends that have money there and I'm really fed up with all this drama of people losing money everywhere.

Yeah. Getting heavy 2018 vibes when ICOs were dying left right and center. Everyone gets sucked in with unrealistic promises of huge gains, a small number of creators of such projects/platforms run away with everybody else's money, while the vast majority of average users lose everything.

We are assuming it is only going to be these smaller platforms which collapse, but I wouldn't be putting any money on larger exchanges either. They (presumably) have better business practices, but they aren't immune to the current climate either.

I hope you are telling them to get their coins out and in to their wallets ASAP. Nexo and BlockFi users have been handed a lifeline here by Celsius and Voyager collapsing first. They would be insane to ignore it. Best case scenario it's all fine and they lose out on a few months of interest. Worst case scenario they lose everything.

When you have $100 million worth of a particular altcoin, you cannot easily sell that altcoin at market rates, so if the price of that altcoin drops far enough to force many liquidations, Celsius will have no way of receiving sufficient money to cover the loan amount.

The halt in withdrawals happened at a time in which the price of ~all crypto was falling/crashing. This makes me tend to believe this is more of an issue of Celsius being a failed bank, and not them putting customer money in exotic "investments".

The lack of transparency is likely something that is being done on the advice of their lawyers. My guess is that any solution is going to involve money being injected from a third party, either in the form of debt or in the form of someone buying (part of) Celsius, unless they end up not being able to honor all deposits in full.

Do we know if Celsius's loan to 3AC, which was the catalyst for their collapse, was over collateralized, under collateralized, or not collateralized at all? We know that Voyager had a $654 million uncollateralized loan to 3AC which was what prompted their collapse, so it is not unreasonable to think that Celsius was in a similar situation, as Celsius don't exactly strike me as a particular risk averse company. If that is the case, then it was the lack of collateral, rather than the falling value of collateral which did exist, which caused them to collapse.

I think its a given right now that they will not be honoring all user deposits in full. With entities such as Goldman Sachs preparing to scoop up their assets at a huge discount, Celsius will not have enough money to pay all their secured depositors, let alone their users who are unsecured deposits and are last on the list to receive any compensation.

---

Celsius have also just fired 25% of their staff: https://www.theblock.co/post/155647/crypto-lender-celsius-dismisses-a-quarter-of-its-employees-calcalist

In other words, 3AC does something dumb with their money, goes down, and takes most of their lenders down with them because they were too incompetent to collateralize their loans, themselves almost single-handedly dragging the market prices down with them.

I don't know about that but I am starting to think of all other companies like Celsius, and first thing that pops in my mind is Crypto.com (nobody is talking about it) and maybe even Robinhood.
Maybe we should create a list of all alternative similar platforms, and warn people to stay away and withdraw any coins they have there.
Same thing could apply for all centralized exchanges, even those with highest trading volume like Kucoin, Bitfinex, Binance, etc.
Withdraw your coins and don't wait for them to start firing people and blocking accounts.

Crypto.com slashed all their rewards and interest rates whilst simultaneously hiking deposit fees, conversion fees, withdrawal fees, and so on, so they are obviously experiencing some issues as well.

Everyone should have left Robinhood a long time ago, as soon as they started freezing regular users' accounts and preventing them from selling shares so they could insider trade and protect the interests of their hedge fund backers. They are incredibly shady.

The list would be very short. Only use decentralized exchanges which let you keep custody of your own coins at al times. Whenever you give up custody to any centralized exchange or lending platform, your coins are at risk.

You know they are often times masquerading as decentralized services that support DeFi, so most people believe they are really working like that and they still own their coins  :P
Most of them have their own tokens that further confuses people into thinking they are some kind of revolutionary blockchain solutions.
 
For example this is what we can see on crypto.com website:

https://i.imgur.com/ivGYnR4.jpg
https://crypto.com/

This is example from Celsius website, how they play with words decentralied/centralized, and they even added Chainalysis in the mix for ''safety'':

https://i.imgur.com/21GGpJr.jpg
https://celsius.network/

I am sure situation is very similar with all other platforms like this, but I guess it's fine if you pay a bunch of money to Matt Damon from advertisement...

People don't understand what decentralized means, and various exchanges capitalize on this fact and call themselves decentralized as a marketing gimmick when in reality they are no such thing. My favorite example is IDEX. Call themselves decentralized, even have the word "DEX" in their name, and yet demand KYC from their users. ::)

Well, there is some truth in that. It was always very transparent from their ridiculous interest rates that they were gambling away your money on risky loans and investments, and now it is very transparent that everyone who blindly trusted them has lost all their coins. :P

Well, not good news. :P

They are officially filling for bankruptcy chapter 11 in NY: https://twitter.com/celsiusnetwork/status/1547375324622618624

Of course their blog post has a lot of lawyer-picked words to spin this as something good for the company.

In the thousand of tweets that were praising Celsius for paying back the land, I've read one that anticipated it..


I was against this scenario, it wasn't making any sense, why would they pay loans and then fill for bankruptcy, although this is 11, not 7, but now that I think more about it the customer will get screwed while the ones that loaned money to Celsius got their funds back before the filling and won't have to sit at the table sharing what's left of the already eaten cake..
Or at least this is what I can make now of the situation!

Were they actually paying unsecured loans, tho? All I know is that they have been going around all DeFi paying out overcollateralized loans, which is an absolutely no-brainer as the collateral is always worth more. They pay $1m in USDC they borrowed to free up $1.5m in BTC collat, for example.

Customers are definitely screwed. Looks like they want to keep getting paid and the regular Joe will most likely be the last one to get anything (at all).

If this is not a scam than I don't know what is, but I expected this bankruptcy to happen with Celsius.
Some people are saying this is going to be like MtGox all over again, but I think this won't stop here because Blockchain.com could face similar destiny from news I saw few days ago.
I would also watch out for any services that use shitcoin tokens like CEL for Celsius, CRO for Crypto.com, or any lending platforms and centralized exchanges.
Watch out what FTX owner Sam Bankman-Fried and Alameda Research is doing during this time, bailing out Voyager, BlockFi...

Speaking of  crypto.com, this is the message I saw yesterday in one private Telegram group that is usually not bullshiting: "Fair warning rumors have it crypto.com is going bankrupt  do with this information what you will but if have funds on it I seriously consider moving them....". I have no idea whether its just some fud like with Kucoin recently, but one can't be too careful after everything that has happened in the last month or so.

Well, both you and me, we "know" this because that's what Celsius says. I might be biased in this but that news come from the same guy who said
https://twitter.com/Mashinsky/status/1535767334668861440

Now, the 10 billion questions is, should we trust this guy that he has paid only the overcollateralized loans, that their value was still overcollateralized, and that they haven't paid back anyone that was lending against some NFT? Of course, there are documents that were supposed to be presented in court but till I see a real court-appointed expert making a report of what happed I'm not going to believe one word, I'm not going to believe even a smart contract!!!!


Probably it's going to be pennies to the dollar a bitcoin.


Again, I must admit that I have very little knowledge on how this thing will play, especially since there is already a controversy on what those funds were, and how they should be treated but my opinion is that everyone should write this as a loss and let it be if something good comes out it will be a nice surprise, if no, that's it.


If crypto.com goes down, that will be a lot more pain to a lot of small users who have a lot compared to their savings on that platform.
As much as I want those CEX and those wannabes new bank order guys to be taught a reality lesson,  the pain inflicted on the users that trusted them with money is making me cheer for them not to crash, or if some do at least make it a crash every three months, not ten in one.

le:fixed typo

Same here. I do wish people stop using those platforms and that they somehow disappear, but I have couple of close friends that have (had?) serious amount of money in Celsius so I really hope that it survive in some shape or form.

Biggest issue is that people didn't see this as a high risk at all (big reason for that is that Celsius never disclosed what they are actually doing with people's money in order to get those percentages) and instead  they treated it like its the real bank (despite everything, immensely more secure than an average "DeFi" platform) and were putting their life savings into it.

They have no respect or consideration for average users. It is very clear on their last tweet, when they made sure to differentiate stakeholders from the rest of the community.
It couldn't be different anyway, since they were gambling with customers' funds while telling them everything was under control and the risks were low.

https://i.imgur.com/VQqC4Dj.png

https://pbs.twimg.com/media/FXlmllCUsAAjLSE?format=jpg&name=large

For those who might interest, an investor who is also a lawyer points some observations regard the currently situation at reddit:
https://www.reddit.com/r/CelsiusNetwork/comments/vyw8et/bankruptcy_filings_are_answering_some_questions/

Well, he updated it with some good news :
but two of those points are seriously bad, and one of them is almost an insult

What a surprise, inflating the numbers with x5, probably the sector standard practice.


This is really bad, really bad PR. Imagine bragging how crypto is better than gold, how you try to invest your crypto holding only to find out the company you blended money with was buying gold with it, this will definitely piss a lot of users, and I can understand why.


Celsius claimed to have 22 000 ASICS, since we know they have S19, and we can from here go and think of 6 cents per kwh including other costs at maximum, so one part of their operation, Celsius Mining LLC should still be profitable, we're talking about $3 million a month, of course, peanuts compared to the 1.1 billion but there is still chance for that to survive, plus about at least $100 million in assets here.

One more piece of bad news, $600 million in assets are CEL tokens, this might be just another 600 million hole.

https://i.imgur.com/pH3m5VQ.png

Does it mean they still have 4,31$ billion dollars in assets? If so, and if those informations are legit, it's not terrible, because they still maintain more than 75% of users' funds and could potentially recover totally in few years through lending without major risks. They just need to stop increasing debt, that is, they should stop paying weekly dividends to investors.

Regards the mining business, what is more interesting at this point, to keep running the mining operations or to sell the farm to raise funds faster, taking advantage of the low price of bitcoin, so they can hold for the next bull run?

I don't believe those numbers of a second. The entire marketcap of CEL is $178 million, yet they claim to have $600 million in CEL tokens? And with a daily volume of $30 million, they would dump the price to nothing trying to offload even a fraction of those tokens. Given that they can't accurately price their own token, what's the chances that they have accurately priced their other cryptoassets? And things like mining assets (ASICs) only go down in value as time goes on.

And even if you believe all that, they still have a deficit of $1.2 billion. According to this article (https://www.theblock.co/post/157647/celsius-bankruptcy-documents-claim-1-2-billion-balance-sheet-gap), Celsius have said that their mining operations will be used to pay off their deficits. Apparently they mine ~14 BTC a day. At current prices and hashrates, they would only be able to mine a little over half of that $1.2 billion before the block subsidy disappears in ~120 years. And never mind that they would have to continually spend more money to keep up their proportion of the hashrate as their current mining hardware becomes outdated. Essentially they are saying "If there's a huge bullrun we might break even again." Absolute pie in the sky thinking.

I am not sure.

It does appear that Celcius has insufficient funds to honor all deposit holders in full. It is not clear why they have less assets than liabilities, although I think it is likely because of a (series of) bad loan(s) they have already written off. Perhaps the loan to 3AC was not sufficiently collateralized as of when the loan was written down and/or other loans were in a similar position.

I really don't see many people depositing more money into Celsius, nor becoming a customer in the near future. I honestly don't think PR should be a concern right now.

You generally cannot pay a debt shortly before filing for bankruptcy, and these payments may be reversed by the bankruptcy court if they actually occurred. If collateral held by a third party that secured a loan was liquidated by the lender, that may be a different story.

There are a lot of things that will affect the percentage of their deposits that deposit holders get bac, but I think it is most likely that it will be a long time before customers have their money returned.

That's another of the headaches people are going to have when trying to solve this mess.
Different sites list different circulating supplies, the best explanation I found on coigecko,

Total
692,753,441
 Cel Treasury (0xce60) - 155,156,600
 Celsius - Team (0xB2D9) - 9,266,369
 Loan Collateral (0x81b5) - 117,000,000
Est. Circulating Supply 423,415,980

Still doesn't make 600 million


There is something really fishy there, from the loan which Celsius Mining took from Celsius Loaning to those numbers.
If they mine 14 BTC a day, you have 1.5% of the hashrate, it means around 3Exa, and it would nearly match the 22 000 Asics they claimed to have operational before. But, they claim 700 million in mining assets, and there is no way in hell 22 000 S19 would be worth now more than 100 million. So that is paid in advance gear!


This changes the situation bit as it does get closer to the 720 million mark with the preorders, but it states making less sense of the operation, meaning they have far less powerful stuff mining, suspecting something around an average of s17, so it means the value of the gear is also lower, and their efficiency is also, so the profit is also a less than expected.

An S19 brand new goes for 4k, even if we consider all of them to be in this range it won't be 720mils.
Of course, they could have other miners on other algorithms but the numbers are still inflated, I would say at least by half.



It's tricky, in the US you can claim depreciation for miners, the price has already gone down, I don't think there are buyers anymore, and when will that bullrun even come? Besides, if a bull run comes the price of gear goes up like that again, an S9 was selling for $60 during the bull run it reached $800-$1000, people went crazy. No, without a clear report on everything, how long contracts for rent electricity, rates, there is no easy answer.

Judging by the people I know that have money in Celsius, I don't think that significant amount of users will be upset over that. People I know that have money there are only in crypto to make more fiat, they don't really care about anything else. They would gladly put their money into whatever they think will bring them more money at the end of the day, so who cares whether its gold, stocks or something else. Well, at least that's the profile of people I know that have money there.


Wait, they are still paying weekly dividends with the same rates? Crazy...

If Mashinsky faked assets' numbers it's going to get worse for him yet... He made it through an official document attached to the bankruptcy proceedings.

---

Yes, every monday I receive a notification from them. :P
It really makes no sense for a company which is theoretically trying to recover itself from a huge debt, unless they had to file bankruptcy first, before stopping paying dividends.
https://i.imgur.com/VKVJJVe.png

I would say with near certainty that the numbers in the bankruptcy filing are not intentionally inflated. Celsius has no reason to inflate these numbers. No sane person is going to deposit additional coin onto their platform, including coin for collateral for a loan. The bankruptcy filing will put all litigation on hold (prevent litigation from being filed/initiated), and any actual values will eventually come out, if the values are misrepresented.

There is the potential that some of the numbers are missing some context, or are based on faulty assumptions, but I don't think they are being intentionally misrepresented.

I highlighted a quote from Mashinsky in another thread here: https://bitcointalk.org/index.php?topic=5403254.msg60564757#msg60564757. Absolutely ridiculous that with millions of people losing huge amounts of money, he is more concerned about the optics of his company.

Yes, exactly. They are pricing their "mining assets" based on the initial cost, and leaving out the fact that if they actually tried to sell these second hand out of date ASICs they would only be worth a fraction of what was originally paid for them.

I would agree. I don't think they are intentionally wrong, rather just another indication of Celsius' amateurish behavior.

Seems I always get to read this latest news a bit late, thought they were actually getting themselves out of trouble (also because they didn't file for bankruptcy earlier). Think stompix's right. This way, they do backdoor agreements with the powerful guys they owe money to, pay most of all of it of, then get the law to protect them while they pay whatever's left to the retail cake eaters.

To anyone else having money with other lenders, might want to take out all you can before their own insolvencies come to light (and I bet they're all just hiding as best they can hoping for crypto markets to save their ass).

I'd be interested to see what Mashinsky does next after he likely loses his job after Celsius likely either goes out of business or is sold.

Celsius currently has negative equity to the tune of at least a billion dollars (according to their numbers). This is almost certainly going to result in losses for their customers.

I think the mining loan is probably more of an example of Celsius engaging in risky behavior. Miners are not trivial to liquidate, especially in large numbers, and mining is an inherently risky proposition.

The more details about Celsius' business practices in recent time, the lower opinion I have about their management.

Reports are that he sold around $45 million worth of CEL tokens he had very kindly given himself prior to collapse, so I'm sure he'll be fine. Although no doubt he will launch Celsius 2.0 or some other bullshit and people will flock to it. I mean, just weeks after the scam that was Terra Luna collapsed to nothing, Terra Luna v2 has a volume of $90 million a day. There are plenty of people in this space who are beyond stupid, and immoral people like Mashinsky are all too happy to capitalize on that stupidity.

---

Looks like Celsius are being served a class action lawsuit: https://www.johnreedstark.com/wp-content/uploads/sites/180/2022/07/CelsiusClassAction.pdf

I am sure that he was paid well during his tenure, so even if the reports are false, he is likely to be okay financially. It is pretty rare for someone who once ran a business to not try again.

Luna is probably off topic here, but its recent collapse was not the first time that something similar had happened to a stablecoin that was not backed by actual assets. I don't think Luna's model is sound because someone can bring down the coin by buying up a lot of it over time, and quickly dumping it onto the market, causing its dollar peg to break, removing confidence in the coin.

The automatic stay from the bankruptcy filing will put the lawsuit on hold. I am not aware of any evidence that Celsius was a ponzi. I think it is more accurate to say that Celsius made risky investments (loans) that turned bad.

@PrimeNumber7. How much coins in Ethereum and Bitcoin is Celsius holding in their wallets? If the whole cryptospace pumps with both of those coins going 3x from where they presently are, I reckon Celsius might have enough to pay back their depositors and have some extra profit in dollars hehehehehe.

Impossible to say for two reasons: We don't know how much of each crypto they are holding, and we also do not know how much of their outstanding liabilities are denominated in crypto (or in which crypto), as opposed to in fiat. If I loaned Celsius $20 million which they used to buy bitcoin, and they later return that $20 million (plus interest) by selling a small portion of that bitcoin which has since gone up in fiat value, then sure, that's fair. If, however, I loaned Celsius 1,000 BTC when BTC was $20,000 (for a total value of $20 million), I'm not exactly going to be happy with Celsius repaying that loan by paying me back 400 BTC when BTC is $50,000 and calling that fair.

What do you call offering high-profit rates if you lock your deposits for a limited time and then pay indeed for a while those returns till ..there is no money left?
As for bad investments, it's still a bit foggy but I can see a small resemblance between investing in cryptodickbutts and hoping that a macaroni factory would be able to pay $20 million (in 1920)  :D

Right now with the lawsuit it's Celsius who will have to prove they are not a Ponzi, and they are going to have to come up with proof of how they expected to generate those returns, and no judge will believe them if they will try to weasel their way out by saying they believed those assets will rise in value and so on. Otherwise, you could start offering 50% a day and your excuse would be that you know think the moon plot you've bought will go up 1 quadrillion times because there is gold under it.


Yup, postal reply coupons! 400% profits from arbitrage, no risks.

Weekly payroll to Celsius employees. Considering those are weekly values, it must stay around 16,724,008$ a month.
That is not the expected behavior from a company claiming to be trying to recover itself from bankruptcy and acting at the best interest of the community. The directors and employees are simply milking most money they can from the remaining funds for themselves, while it's still possible, and at same time deluding depositors to believe there is a recovery plan in mind.

Imagine how many small depositors from the total 300,000 ones (with more than 100$ invested) could be paid with those funds already.

https://pbs.twimg.com/media/FYHfc00XoAA5bax?format=jpg&name=medium
https://twitter.com/TheFinancer/status/1549765438128652289

---

Recent updates from the first day hearing (which ocurred last Monday) said there is going to be an option for investors to choose receiving part of their assets back with a haircut, without waiting longer. The other option is a long term recovery which is totally uncertain.

I am not sure how many ETH and BTC Celsius have in their various wallets. It appears they have approximately $1.75 billion worth, according to a financial statement posted above.

You are basically mirroring what happened with MtGox in their multi-year bankruptcy proceeding in Japan. In the Gox case, customer deposits were converted into fiat liabilities, and over the course of several years, the value of the coin being held by Gox increased.

I am not sure how liabilities denominated in various crypto will be handled in US bankruptcy court. Various loans, and losses are being described in terms of dollars, however, I would believe that the loans, and collateral are denominated in terms of various coins.

While it does appear likely that the underlying root cause of Celsius' collapse was that of a bad loan to a hedge fund that failed, we do not know with certainty why Celsius has such a large hole in their balance sheet. If Celsius has already liquidated collateral at prices less than the loan repayment amounts, they will likely not benefit from any increase in crypto prices.

They were essentially a bank. They took deposits and paid interest on those deposits at rates less than the rates they were lending the deposits out at, and were pocketing the difference, less any loan losses.

It is up to the Plaintiff to prove their case, not the defendant.

It appears that employee payroll is expected to be ~$3.4 million to employees for the 30-day period following Celsius filing for bankruptcy.

My assumption is that those employees are performing work for Celsius, and without that work, Celsius would incur losses greater than the salary being paid.

Of course, this is not a trial about establishing Celsius is a Ponzi scheme, but the results and evidence presented will matter if there are any follow-up lawsuits.

The plaintiff can simply make accusations based on the numbers at hand that Celsius has gone outside their promise and has invested in risky assets with no collateral, it can accuse Celsius from multiple angles of everything, including the misleading numbers on stablecoins returns which makes zero sense confronted with their own statements on their business model and contradictory statements in press releases.
We already know that Celsius had gone bankrupt, and we know that it has lost investors' money, this is not about establishing who's guilty but how much guilt we're talking about.

The "I didn't do it" doesn't work here if for clarification the judge asks for any documents or statements Celsius will have to come up with numbers, and if those numbers <x then they were paying the interest from deposits, which is you know what!

Follow-up lawsuits? Celsius has negative equity. There is no money to be given to plaintiffs if they lose any lawsuits. The people that will win in any lawsuit against Celsius are the lawyers, and this is true regardless of the outcome.

They appear to have loan losses that exceeded their estimates. This could have been because they made a number of loans not fully secured by collateral they do not expect to be repaid, or it could have been because they made a number of loans whose collateral value fell below the repayment amount before it could be liquidated, and do not expect these loans to be repaid, or it could be a combination the two.

That's exactly what adversary proceedings in bankruptcy are for.
Second, the lawsuit on hand is also against individual defendants if found guilty of misappropriation of funds in the process there we go again, it's another case.


As I was saying, you give away money, you have no collateral and you pay interest hoping you will get your money back with interest on top of that.
Ponzi's macaroni factory!

That is not what a ponzi is. Banks make unsecured loans all the time and are generally successful in doing so.

A ponzi is a scam in which previous investors are repaid by future investors investing more money. That is not what is alleged to have happened in the case of Celsius. What appears to have likely happened is that they made risky loans that turned bad.

Sure, but they didn't end up with a $1.2 billion hole in the balance sheet overnight and then shut down withdrawals the next day. They have obviously had major liquidity issues for weeks or months, all the while continuing to advertise and attract new users as well as encouraging more deposits from existing users with their obviously unsustainable interest rates of up to 20% a year. They must have known full well for some time that they would be unable to pay out interest to any new deposits coming to their platform, in which case these new deposits were likely only being used to pay interest on older deposits and keep them afloat while they struggled to secure additional sources of funding.

So no, while their business model is not a Ponzi and giving out unsecured loans is not a Ponzi, I think it is highly likely that they were operating like a Ponzi in the weeks leading up to them suspending all accounts.

I don't think we know how long Celsius was having liquidity problems for. I don't remember seeing anything about withdrawals being delayed longer than normal until they were outright halted.

There was chaos in the altcoin market immediately prior to Celsius halting withdrawals. TerraUSD and Luna were both crashing, other stablecoins were trading under $1 (temporarily), and many altcoins were declining heavily. It is possible that Celsius was forced to liquidate collateral at prices below the loan repayment amount during this chaos when there was sufficient collateral prior to the chaos. If this is true, they may have taken a 100% loss on loans backed by Luna and/or TerraUSD.

Seems like an accurate take. By accepting deposits they created a need to repay. Then by using those customer funds to profit they turned their depositors into investors and their funds from liquid to illiquid. Without a way for customers to trade their illiquid investment, they became bagholders for a failed business model which continued allowing deposits after being insolvent. I don’t know the laws about accepting new funds once you’re insolvent but I imagine they will be tested in this case.

No, but as I said above, a $1.2 billion deficit doesn't happen overnight. It is safe to assume there were problems behind the scenes for several weeks.

Terra collapsed on May 10th, while Celsius suspended all withdrawals on June 13th. That's a full month they continued to advertise to new customers, including specifically denying rumors they were insolvent.

Not just that, but making several public statements on their website, social media, videos with the CEO, etc., specifically stating that the insolvency rumors were FUD. I can't imagine that's legal.

Because banks have a different model when handling unsecured loans and unlike Celsius, they have a way to get that money back, Celsius loaned money to people that might now even exist at all with the amount of fake complete identities that are sold for 50$ right now.


Alleged!
And it can also be alleged that they paid, as o_e_l_e_o mentioned extreme rates upfront, and I might add, even before that money would produce anything just in order to increase their customer numbers and amount of funds on hand. Seeing that they've inflated those numbers by at least 5 already, this is another hint at them expanding without any proof of actually having the deals that generate the revenue keeping the pace.


Nobody has problems until they have problems!
I'm really getting curious why you're clearly defending their way of doing business without knowing for certain a single fact but at the same time, you completely deny any other scenario for this just because there aren't any solid proofs.


It wasn't "immediately" prior but almost a month.
Interesting, you can see the imbecile right here (https://www.youtube.com/watch?v=aPwxT4gxs0M), after the Terra crash advertising both lending, staking, and their new card product as if nothing has happened.
So, it's one or the other
- Celsius had no problem caused by Terra and the reason for the fall is a Ponzi scheme
- The reason for the fall is Terra and the altcoins drop, but their CEO is a lying PoS, and if he knew he is insolvent at that time him trying to advertise his business to attract customers was surely a way to plug the hole, which is again a Ponzi way of dealing with losses.

I really am not sure. I await an explanation from Celsius and/or a report from the bankruptcy trustee to find out what specifically happened to cause the deficit.

It is possible that a number of things caused the deficit. I would note that banks typically will classify a specific loan as "doubtful" to be fully collected once particular criteria are met, and generally one of that criteria is delinquency past a certain threshold.

Here's an interesting take: https://archive.ph/y56hb (Financial Times article, archived to bypass paywall).

I'd recommend reading the whole article, but here are a few relevant snippets:

So, within the 90 days before Celsius declared bankruptcy, Tether liquidated bitcoin from Celsius to the tune of $840 million that they were holding as collateral to a USDT loan they had given Celsius. Because this was within 90 days, it falls under the "preference" clause of the Chapter 11 bankruptcy, meaning this value can potentially be recovered. Tether's argument will obviously be that the loan was secured, but the counter argument here is that simply handing over collateral does not mean a loan is secured and it is unclear whether all the necessary paperwork was properly filed. If it wasn't, then Celsius could potentially recover the value of this loan to be added to their pot of assets to be redistributed, and Tether would be left with a $840 million hole in their finances as well as being relegated to the bottom of the pile of "unsecured creditors" who will receive pennies on their dollar when Celsius' assets are divided up.

The outcome here will be extremely interesting, as it would almost certainly apply to all the other platforms who have been handing out loans that they are calling "secured", when in actual fact they may not be at all.

The statement that tether made (https://tether.to/en/tether-discloses-celsius-loan-liquidation-process) was clear that there was a written agreement regarding the collateral. The statement also says that the excess collateral was returned to celsius after the collateral was used to repay the loan, which implies that tether had possession of the private keys associated with the collateral.

It is also unclear as to when the loan was made. If it was made prior to when el Salvador made bitcoin legal tender, there would be an argument to say that a different standard would be needed to perfect their security interest.

Based on the total assets and total liabilities of celsius, unsecured credits will theoretically get about $0.78 for every $1.00 in unsecured claim, provided that celsius does not see additional losses. If you assume that tether did not perfect their security interest, there is an implied ~$183 million in losses to tether.

I do not doubt that tether had assistance from legal counsel with drafting an $800 million loan agreement. I would tend to err on the side of that tether had a perfected security interest in the collateral.

I had some sats on celsius, so I tried to fill the online form on stretto. But I'm not a lawyer and I'm not sure I made everything correct.

Also, there isn't any place where to put a bank or bitcoin address, are they supposed to refund customers using their celsius wallet or it is simply too early?

To however has a Celsius account, be extra careful with the potential phishing emails in the near future.

Just saw I received this email from them, about how their emails database was compromised through a third-party:

News update.

It appears it was not only Celsius' involvement with Luna and UST that caused the cryptolender's bankruptcy. Their CEO has made himself the head of their cryptocoin trading strategy. I reckon that we should look around the cryptospace and know which other CEOs or company executives are doing something similar hehehhe.



Alex Mashinsky took control of Celsius trading strategy months before bankruptcy

In January, Celsius Network boss Alex Mashinsky gathered his investment team to tell it he would be taking control of the crypto lender’s trading strategy ahead of an upcoming US Federal Reserve meeting.

Prices of popular cryptocurrencies such as bitcoin and ether had fallen from their all-time highs and the former telecoms entrepreneur said Celsius needed to protect itself from further declines. A hawkish outcome, he was convinced, could crash crypto prices.

In the days before the Fed met, Mashinsky personally directed individual trades and overruled executives with decades of finance experience, according to multiple people familiar with the matter.

In one case, Mashinsky ordered the sale of hundreds of millions of dollars’ worth of bitcoin, refusing to wait to double check Celsius’s often unreliable information on its own holdings. Celsius — which at the time held $22bn of customer crypto assets — bought the bitcoin back a day later at a loss.

Source https://www.ft.com/content/43d4fb5d-72a1-468c-aac8-9e11c4693f4e

How the mighty have fallen, but they still can't get their shit together:

Back in 2022:
https://talkimg.com/images/2023/05/20/blob04fbecc81ea3db71.png

Now:
https://talkimg.com/images/2023/05/20/blob7f07dfd309d48548.png

They are advertising how much money they've paid back and how much they have recovered. What's next, a shinny bar that says we've lost only 75% of our customer's funds?

Btw, here is the magical plan:
https://cases.stretto.com/public/x191/11749/CORRESPONDENCE/1174908162250000000001.pdf
We have some sny numbers and letters, let's make it work somehow.

And yet people still think that those at the top know what they are doing while in reality they are not better than many of us noobs that are buying high and selling low.  :D



Is that the money paid out to small investors, or only to major ones? I know couple of people that have decent amount of money in Celsius and I don't remember anyone saying that they get anything back yet so I guess its the latter.

I very much agree! 3 Arrows Capital was the most recent example of this that showed that some experienced crypto hedge fund managers are also just gambling on volatile market moves with unsustainably high leverage hehehe. Everyone thought Su Zhu's posts in social media was to trick his followers to buy if he was selling or sell if he was buying, however, what he was posting was the whole truth heehehe.

Here is an archive (https://archive.ph/YTeHp) of the article that is not subject to a paywall.

Neither Celsius CEO Mashinsky, nor Celsius commented on the article (as of when the archive was pulled), but if the article was accurate, Celsius was speculating with customer money on its own account. I don't know how reliable the reporter is, however, if this is true, Celsius was being very reckless, and I would speculate that the reason for the massive difference between customer deposits and Celsius assets is due to trading losses shortly before Celsius halted withdrawals.

I will reserve judgment until more credible information comes out, but in the interim, I would not let my money anywhere near the people involved.

The guy is a megalomaniac who thought he was untouchable at the top of the world. The lack of responsability and empathy for customers' funds must be explained by psychiatry. The way he portrays himself on his twitter account with a picture of himself carved out on a roman bust, making reference to the emperors of ancient times, gives a hint of his delusional, vain and selfish characteristics.

It shouldn't be risky or hard to lend money and pay dividends to lenders proportionally to the extra % paid back by borrowers... He completely screwed up a viable business model.

Won't his patrimony be seized and used to pay Celsius' creditors?

It's not so hard to be a successful trader (or at least think that) during bear market, but once we enter bear market its completely different story. I rememebr back in 2017 I thought I am pro just because every shitcoin I bought was pumping but then shit hit the fan and I realized how clueless I was.


Even if they say its not true, no one will believe them. Just remember that few hours before Celsius stopped withdraws, Mashinsky tweeted that rumors of Celsius having issues is FUD and people shouldn't worry while he obviously knew what's going to happen.


You just described majority of people that are behind these big crypto platforms/projects but more often than not they got served a slice of humble pie, like it happened with Do Kwon.

The problem is that when a bank lends out money, it is not guaranteed that everyone will repay their loan in full. When that doesn't happen, the bank can have losses.

I wouldn't necessarily disbelieve what Celsius says be default, and there may be a reasonable explanation regarding the trading losses. For example, the trades could have been hedging positions, and the trading losses were offset by gains elsewhere on a 1-1 basis. Based on the article, this doesn't appear to be the case, and it appears the trades were speculative in nature.

Here in my country banks don't lend money when the borrower can't put any collaterals on the table. The negotiations are very tied to not let any gaps which may cause losses for the banks. A debtor doesn't have his name cleaned and can't do any other business until he finally pay his currently debts. Theoretically, crypto lending also involves collateral, and in case the person doesn't pay the loan back, it's possible for the company to go after the debtor, since lending platforms enforce KYC.

When a bank crashes and go bankrupt it must be due to bad management. In this case the company Celsius was gambling with investors' funds doing daily trading.

These companies are a joke. Not backed by real professionals. How can you lose money if you sell at good prices and then be patient to buy. Moon boys celsius.

Third day hearing at the court: Celsius proposes returning money back to customers who had their funds at Custody and Withhold accounts (not Earn and Borrow programs). It must cover a slight percentage of total customers, while the majority who was there obviously to earn interest or borrow money is ignored.

The reason behind the proposal might be this one:
https://i.imgur.com/Gtp1L3f.png

Mashinsky doesn't give one without taking two...

So, and correct me if I'm wrong here as I've not been keeping up to date with this case, does that not imply Celsius are not only planning to just keep the contents of all earn accounts, but are also planning to try use the 90-day clawback rule to try to recover any withdrawals from earn accounts in the 90 days prior to them filing for bankruptcy? So even if you moved your funds from an earn account to a custody account, if you did it within the 90 day limit then those funds will be forfeited too?

Yes, you are right. Also, value must be less than 7575$. At first moment I believed it could incude every customers holding up to 7575$ on their accounts (including Earn program), but it would be too good to be true... Now let's see what is going to be decided by the court.

https://pbs.twimg.com/media/FbuXa-ZXoAE5QcD?format=jpg&name=medium
https://twitter.com/news_whales/status/1566011790277976067

From that tweet:

This would be something else entirely if it passes. Imagine heeding all the warning signs, getting out of Celsius just in time in the days or weeks leading up to their collapse, and then later getting a court order saying "Sorry, give us back all your money or face charges". We would have to change the phrase to "Not your keys, not your coins. Your keys, maybe still not your coins."

Looking more and more like the only safe way forward is to completely avoid every centralized exchange and lending platform in existence.

I wouldn't use the word "forfeited", but yes, recent withdrawals from "earn" accounts may be subjected to clackback under bankruptcy laws, and the Celsius bankruptcy estate is going to be obligated to maximize the total return (as a percentage of total claims) of claimaints.

I would rather describe the process as account holders who had recently withdrawn may have to have the amounts withdrawn comingled with other Celsius assets, and the amount withdrawn would also be added to the claims of debtholders. I believe you had previously described the probable outcome of account holders as receiving "pennies on the dollar" of their deposits, however, I think this is unlikely, at least based on current financial statements. Any clawback is also going to be subjected to litigation

I don't have the data to back this up, however, I think it is likely for many who have withdrawn to have other claims against Celsius, and any amounts demanded to be returned, that are not returned could be offset by other actual recoveries. This would be far less expensive than trying to go after individual account holders, although there is the potential that some who are not in the above situation may see their (hypothetical) "court ordered" demand to return coin to the Celsius bankruptcy estate to be sold to debt collectors, who in turn try to independently collect.

Yes, that's what I would expect too. So all money in earn accounts, and all money they can recover which was withdrawn from earn accounts in the previous 90 days, will simply be added to their pool of assets to be redistributed between all stakeholders. I still think the average user will end up with "pennies on the dollar", since all Celsius's big secured investors will take the majority of the funds, leaving little to be distributed among unsecured investors, i.e. regular users.

And if they refuse to return their withdrawals if ordered, then I suspect they would void any claim they had for other assets still stored on the Celsius platform. What a nightmare for these users, and what despicable behavior from Celsius. Clearly trying to maximize returns for their large investors at the expense of their average users.

Have you seen any financial disclosures or court filings that suggest that Celsius has a lot of secured creditors? In bankruptcy, equity holders typically are paid last.

Any decision on the legitimacy of claims is up to the bankruptcy court, not Celsius. I think it would be equitable if amounts that are ordered to be returned but are not are offset. So if a user was ordered to return $100, but did not, and unsecured creditors were due to receive $.70 on the dollar, the bankruptcy court would withhold $30 from that user's other recoveries.

I have never heard of a court voiding a debt because the debit holder does not pay their own debts to the party in bankruptcy.

No, and as far as I am aware, neither a list of secured creditors or a statement that there are none has been made/filed. I'm basing these assumptions on the court documents they filed previous during the bankruptcy proceedings here: https://www.theblock.co/post/157647/celsius-bankruptcy-documents-claim-1-2-billion-balance-sheet-gap. With "Loans" of almost 1 billion dollars, on top of a $1.2 billion hole in their balance sheet, then there is not going to be much left to give back to the users.

I'd be happy to be proven wrong, but I think Celsius users shouldn't be holding their breath for a good outcome here.

Besides, if Mt. Gox users had to wait years just to get their coins back, then I don't expect Celsius users to expect their money back after just a few months.

Sure, the Gox distribution was slowed down by lawsuits, but bankruptcy advisors are not known for acting fast.

Is it even possible for the court to force customers who withdrew on the last 90 days before the bankruptcy to return the funds to the platform? Are there legal consequences, especially for foreigner investors?

Does anyone know if the company continues paying its employees in a regular basis? If so, the longer this lawsuit takes the less money is going to remain for customers. I fear they are just spending most money as possible in wages to fill their own pockets, lefting less as possible to be splitted among everyone else in the end.

Possible? Absolutely. Whether or not they actually do is another question.

For US citizens, then they send debt collectors after you, along with all the usual bullshit that entails. For international users, I'm not entirely sure, but I suspect Celsius would probably have to bring a court case against every individual they wanted to pursue in their own country of residence, which is highly unlikely to happen unless someone withdrew several million dollars worth of crypto within the 90 days.

If you were to create a company, and that company were to lend me 1BTC, your company would have an asset, a loan worth 1BTC.

Celsius was in the business of making loans to customers. The $930 million in "loans" on the financial statement you cited are the loans they have made to their various customers. There is also a $310 million counter asset to account for loans that Celsius does not believe are going to be repaid, so the net amount they believe they will be repaid is $620 million.

The financial statement you cited also has "custody liabilities" and "other liabilities" being at $180 million and $390 million respectively. If you assume that both of these classes of liabilities will be repaid in full before all other liabilities, both the assets and liabilities would fall by a total of $570 million. This would put assets at $3,740 million and liabilities at $4,930 million. I believe that some have questioned the "CEL tokens" listed on the assets portion of the cited financial statement, and if you were to remove both the CEL liabilities and assets, the net assets falls to $3,140 million, and the liabilities total $4,720 million. This implies a recovery of about $0.66 on the dollar.

Granted, the net loans cited above likely has offsetting amounts in assets under "user liabilities", in the form of collateral for the various loans Celsius has made. These borrowers will likely seek to have their collateral offset on a 1-1 basis for the amounts they owe Celsius. I don't know if this is something the bankruptcy court would allow, but if they did allow it, both assets and liabilities would fall by $620 million, bringing assets to $2,520 and liabilities to $4,100, which implies a recovery of about $0.61 on the dollar.

Based on the above, I think it is reasonable to expect for some customers to receive at least approximatley $0.60 on the dollar on their deposits, while others may be made whole. The accuracy of this prediction is obviously predicated on the accuracy of the financial statement cited, and the crypto market, among other factors.

Ahh good point. I've misread the statements.

Taking your figure of $0.60 on the dollar, I think there are other things which still need to be factored in. It is unclear if the custody and withhold assets that uneng discussed above are included in these statements. If they are, and are similarly removed, then the number of $0.60 drops further. We also have to consider Celsius's ongoing costs. They have a number of employees who are still on their payroll, and they will have extensive legal fees, lawyer fees, etc., during the bankruptcy proceedings. The longer this goes on, the less money there is to give back to users.

I might have forgotten, however, has it been mentioned that Celsius' head of lending is also a pornstar? Her name is Jessica Khater and it appears much of her pictures and videos were removed from the internet. They have become very rare, someone should recreate them into NFTs hehehehe.

https://lumendatabase.org/notices/25216054#

Sounds like a FFF fest.

Here is a link to the most recent court documents: https://cases.stretto.com/public/x191/11749/PLEADINGS/1174909072280000000015.pdf

I would draw attention to Paragraph 10. A. a. and b. (emphasis mine throughtout):

Paragraph 12:

And also Paragraph 16:

This is bad for Celsius. Outright lying to their users, in the red for three years before declaring insolvency, actively running a Ponzi scheme. Mashinsky should go to jail for this.

In other news, Mashinsky's wife has started selling these T-shirts on her business's web shop: https://usastrong.io/products/unbankrupt-yourself-t-shirt-black. ::)

Yup, the Custody assets, and liabilities are both listed as $180m.

I think this snippet is particularly interesting to me:
I would speculate that Celsius was insolvent, but was able to meet customer withdrawal requests until confidence in the crypto market declined due to Terra/TerraUSD imploding. Years ago, I had some money in Celsius, and if I remember correctly, they had strange incentives for people to keep your coin on their platform, for example, I remember that interest had to be withdrawn "last" and that you don't get "interest" on the interest payments you receive. So if you deposited $100, earned $10 in interest payments, and withdrew $50, you would only be earning interest on $50, even though you had $60 in your account. I believe they may have also had daily withdrawal limitations, but I am less certain about this.

So they basically were able to get enough people to be willing to keep money on their platform for them to (hope to) be able to "earn" their way out of insolvency. Although this was going to be especially difficult considering your quote about Celsius not being profitable on an operational basis (I would presume Celcius management was trying to correct this).

Consider that statement alongside the statement in Paragraph 12 that Celsius had never earned enough revenue to cover all the interest and yields they were paying out. It seems to me that they were only able to meet customer withdrawals by either running a large fractional reserve and hoping most users didn't withdraw (hence their incentives for keeping your coins with them), or simply through an outright Ponzi, and this this was the case for several years. I don't know what their exit strategy was here? Hope that they gambled on the right shitcoin with their users' money to make up for their huge deficit? And then when they gambled on the wrong one (Terra), the whole house of cards collapsed.

It's also quite amazing that they made enough losses through 2020 and 2021 to end up insolvent, when that period saw a massive bull market with bitcoin going from $5k to over $60k. You really have to wonder just how irresponsible they were being.

Snark but...why would you think they were trying to correct it? What they had made the operators a lot of money. Going through the link that o_e_l_e_o posted it looked to be a scam / ponzi from almost the beginning.

If I was running it and seeing all the exit scams that happened with no repercussions to the owner / operators I would keep running it that way.

Difficult to withdraw, bonus for keeping funds in, odd rules, etc. It just screams non legitimate.

-Dave

It is the business model of Celsius (and with mainstream banks) to operate as a fractional reserve, however, to also operate as a solvent enterprise (that is that their net assets exceed their net liabilities). So celsius might have 0.1BTC in their reserves for every 1BTC they have in customer deposits, but they also have 0.9x+BTC in other assets, such as BTC that is owed to them (that is net of any loans that are unlikely to be repaid). As long as the bank properly manages risk in making their loans (and pricing their loans and deposit interest rates), there is little risk of loss to their deposit holders.

According to the filing you cited, Celsius had financial setbacks in 2020 and 2021, which caused them to become insolvent. Piggybacking on my previous example, Celsius might have had 0.1BTC and less than 0.9BTC in other assets for every 1BTC they owed to deposit holders. It is not clear what these setbacks were, or how large they were.

The root cause of Celsius' unprofitability could have been caused by three things:
1 - Celsius may pay more in interest to deposit holders than it receives in interest payments from loans they make, even though the interest rate they charge borrowers is greater than the interest they pay to deposit holders. This can be solved by increasing the volume of loans they make, or reducing the interest they pay to deposit holders.
2 - Celsius may collect more in interest from borrowers than it pays out to deposit holders, but this net interest income may not be enough to cover the operating expenses (such as employee salaries, office rent, marketing, etc) of running their business.
3 - Celsius collects less in interest than it pays out to deposit holders after accounting for loan losses.

1 and 2 are very similar. Both can be solved by increasing loan volume and/or reducing interest paid to depositholders. Both would mean that Celsius had mispriced their interest rates. I think it is most likely that the market for crypto loans is not particularly big, and the market for crypto deposits is especially big, so the most likely solution would be to reduce interest rates paid to deposit holders. Lowering interest rates means that some deposit holders would withdraw, and if Celsius was insolvent, this is not a desired outcome. 3 would mean that Celsius has poor risk management with regards to making loans, and this would need to be improved.

I think either 1 or 2 is probably most likely. If you look at the financial statement (https://www.theblock.co/post/157647/celsius-bankruptcy-documents-claim-1-2-billion-balance-sheet-gap) you previously posted, you will see $720 million in mining assets. I think I remember reading about Celsius lending itself (the loan may have been to a related entity) money in order to buy mining equipment. I suspect that this was an effort to increase lending volumes.

The owners of Celsius are well known and are subject to the jurisdiction of American courts. This is often not the case with other crypto scams. To my knowledge, the operators were not being paid exorbitant amounts of money. The business model of Celsius, if priced correctly, is something that should be profitable for its operators if run correctly. Celsius was in fact making loans.

A lot of people involved in financial scams are wall known.....and in jail in the US.
So instead of stock fraud or bank fraud it's just crypto fraud.

Once again from paragraph 12:

If you are paying old people with money from new people you are a ponzi.
They could have stopped payments, they could have cut them to the bone, but they kept paying out AND TAKING MORE IN.

If you are making up numbers to put in spreadsheets to make your business look better then it is, you are scamming.

https://www.youtube.com/watch?v=OWwzQyXAvXI

Does not matter the industry or what is being traded, crypto, cash, gold, it's all the same scam in the end.

-Dave

Sorry, I should have been more clear when I mentioned fractional reserve. It was always clear from Celsius' terms of use, where they explicitly stated they would lend out users' assets without any requirement to hold collateral of equal or even partial value, that they were running a fractional reserve. Recently, however, the fraction they were holding in reserve was obviously significant smaller than it had been in the past, until it reached the point that they had to suspend withdrawals entirely.

Celsius did start to reduce the interest/reward rates they offered to users in the weeks leading up to them freezing everything. Perhaps that very action of trying to slow the inevitable prompted too many people to withdraw their coins and actually sped things up.

As we discussed earlier in this thread, reports are that Mashinsky offloaded about $45 million in CEL tokens he had given himself prior to the collapse of Celsius. This would be bad enough on its own, but taken alongside Paragraph 16 from the document above becomes outright scam territory:


They used users' assets to pump CEL, and then the company owner (plus very likely other high up employees) dumped their personal holdings.

There are some banks, even those that pay interest to deposit holders that are not profitable for a variety of reasons. Being unprofitable does not mean that a company is a scam/ponzi. Most startups are not profitable in their early years.

Even without collateral, a loan is still a valuable asset. It was also likely that it was very unusual for Celsius to make loans collateralized by the same token/coin the loan is denominated in (for example a BTC loan may be secured by USDT).
That is possible, but I think it is more likely that their customers wanted to withdraw their various stablecoins in order to liquidate them/exchange them for bitcoin. At the time of Celsius' implosion, there was a lack of confidence in ~all stablecoins, and many stablecoin issuers were facing massive redemption requests.

https://assets.website-files.com/6296255d9030be506dc09bb7/62c85dacbd454a181c369259_Arkham%20Report%20on%20the%20Celsius%20Network%20(FINAL).pdf
https://dirtybubblemedia.substack.com/p/are-the-mashinskys-celling-out

I would not consider either of the above sources to be especially credible, however, it appears that Mashinsky may have sold CEL tokens over a period of several months. There were also some purchases of CEL tokens, and it is not clear if the amounts cited are net sales, or gross sales.

To me, this looks like it could be something closer to insider trading, rather than the operator of a ponzi enriching himself from new investor money. These sales would have been possible if Celsius was operationally profitable.

The specific allegation is that CEL tokens were purchased by the company in a way such that the value of the CEL tokens on Celsius' balance sheet were inflated, making them look like they had more assets than might have been realistic. I don't think there is an allegation that Celsius dumped any CEL tokens at inflated prices (although their employees may have).

As noted above, the sales by Mashinsky may have amounted to insider trading, and the CEL purchases may have violated other securities laws. I still believe that it was the intent of Celsius to operate profitably on a long-term basis, even if they were not profitable in the past.

---

As someone who may consider investing in a company similar to Celsius, the CEL token concept is something that would turn me off, and I think is a generally bad idea. But I don't think in the case of Celsius, that it makes them a ponzi/scam.

This will be another one of the biggest comedy shows of the cryptospace if cryptocoin owners deposit and hold their coins in Celsius. It is very head shaking why regulators have not banned them from doing any type of business. However, if the comedy show begins, I wish the pornstar returns as head of lending hehehe.



Celsius Network CEO Plans Revival after Crypto Crash

CEO Alex Mashinsky spoke with the Celsius Network employees in a meeting on Sept. 8. He outlined a plan for the firm’s revival, according to a recording of the event shared with the New York Times. In the meeting, he and Oren Blonstein, another Celsius executive, said they hoped to rebuild the company with a focus on custody — storing people’s cryptocurrencies for them, and then charging fees on certain types of transactions.

Source https://watcher.guru/news/celsius-network-ceo-plans-revival-after-crypto-crash

Agreed, but I'm certain more credible information will come out in the course of these bankruptcy proceedings.

I don't see how they could be anything else. He not only used insider knowledge of when CEL would pump, but he owned and operated the company which was actively pumping CEL using depositors' coins.

I am of the same opinion of any coin/token a centralized platform releases. CEL, BNB, FTX Token, KuCoin Token, etc. They all offer incentives like lower trading fees on that platform or more interest if you hold x amount, but the underlying purpose is singular - encourage users to leave their money in the hands of third parties. They should not be trusted.

Imagine the nerve of this person! After everything they have done and the problems they have caused to individual users and the crypto market as a whole, he is considering running a custodial service and being what? Some sort of crypto vault for other people? Worst thing of all, with the right marketing, they will succeed in attracting millions of dollars worth of holdings in no time.  ??? 

@Pmalek. It was a custodial service and something similar to a bank where depositors store their coins as deposits in exchange for interest. However, the difference is the depositors' coins are being lent out to the corrupt people of the cryptospace or deposited to ponzi scheme platforms like Anchor hehehe.

What a joke, now Mashinsky wants to sell 23$ million in stablecoin assets from depositors to pay for the daily operations of the company. In other words, to pay his own wage and the wage of his 300 lackeys (why so many employees?). In fact, this guy should have his patrimony seized and put for sale in order to compensate the losses he caused to hundreds of thousands of people.

Mashinsky's goal is clear. He doesn't want to save or rebuild the company, he simply wants to gain more time to escape jail, while profiting from investors' remaining funds. I don't understand why the justice system is so slow on this matter and at same time why Celsius doesn't remove this scammer from the leadership of the company and replace him by someone else who could at least try to recover their reputation, working side by side with honest professionals who put the interests of the company and customers above their own personal interests.

https://www.coindesk.com/business/2022/09/16/crypto-lending-compmany-celsius-files-for-permission-to-sell-its-stablecoin-holdings/

Anyone who trusts Mashinsky with a single satoshi going forward is a moron. But given that even after multiple centralized lending platforms collapsing there are still plenty of people using other such platforms like BlockFi, I'm sure Celsius v2 will have a steady stream of morons willing to lose their money.

Because he is doing exactly what the big players want him to do. He's screwing over all the individual users and funnelling their money to Celsius' directors, executives, large shareholders, etc. This is what happens when you are an unsecured creditor in a bankruptcy case. You are literally bottom of the list to get back anything at all.

So sad. I thought that by having an identified individual forward the business it would be a guarantee to investors, as he couldn't simply run away with everyone's money like it has happened in crypto world with the usual anonymous ponzi schemes so far. Unfortunatelly that is what is happening, and worse, under the legal process.

I also thought the authorities would act more strictly and energetically towards slippery scammers in a country like US, even though each state has its own methodology.

After all the bankruptcy happened because Mashinsky lied and promised a result to customers he couldn't deliver, gambled with investors' money doing daily trading, lent money without enough collateral. It was like he premeditated it since the beginning, especially when taking his 'terms and conditions' in consideration and how they were written to not give depositors any protection or right over their own funds.

There are plenty of scams in crypto with named individuals at the top who have managed to avoid or evade any punishment. A few that immediately spring to mind are the Quadriga exchange with Gerald Cotten who faked his death, Do Kwon of Terra Luna, and CSW of BSV. Being named does not mean being accountable, especially when you can use all the money you have stolen to pay great lawyers to figure out loopholes or escape mechanisms for you.

I'm not sure it was entirely premeditated from before Celsius was launched, but the fact that these documents show Celsius has been insolvent for over three years and yet continued to offer promotions and interest rates they knew they couldn't pay out in order to encourage further deposits to finance their ongoing Ponzi scheme is very damning.

I understand that Celsius gave incentives for their deposit holders to receive interest on their deposits in the form of CEL tokens versus the type of coin they had on deposit. I would think that Celsius would purchase CEL tokens on the open market in order to have sufficient CEL tokens to be able to credit their customers' accounts. So Celsius had a legitimate business reason to be buying CEL tokens (this is true even if the practice of paying interest in CEL is non-optimal). I can only speculate as to why Celsius was buying up all that CEL as described in the declaration referenced in an above post, however I think it is likely that Celsius' customers tried various means to try to get money out of their accounts around when Celsius halted withdrawals.

I would also note that, according to the sources I cited in an above post, that Mashinsky made many purchases and sales of CEL over many months. In public companies, it is possible for some employees/executives with access to insider information to have written trading plans to buy or sell stock in their company at specific amounts and intervals that are made ahead of the actual trades. It is possible that Mashinsky employed a similar strategy in his trading of CEL tokens. It is also possible that Mashinsky was comingling his CEL holdings with that of Celsius, which although would create a whole separate set of issues, but would not amount to insider trading.
Holding coin on a centralized exchange carries risks, and the person/entity considering to do this should be sure they are being compensated for these risks before deciding to hold their coin on an centralized platform. A trader who frequently trades on a centraized exchange might be compensated by their ability to ~instantly trade when they need their trade executed in fractions of a second. In the case of Celsius, the compensation was interest payments (even if in this specific case, deposit-holders are going to see net losses once the bankruptcy case is resolved), and in the case of CEL, the compensation is additional interest.

My issue with CEL tokens is that I understand it has no real utility. I suspect that Celsius purchased CEL on the open market, and their deposit holders would receive the CEL as interest, and presumably would sell the CEL they received. The price of CEL might increase if some deposit holders haven't (yet) received enough CEL to make it worth transferring to an exchange to sell it for a stablecoin or BTC, or if some deposit holders haven't sold the CEL for some other reason. Also, interest payments are made in batches, so Celsius would need to purchase CEL over time, which would likely cause the price to increase, and at the time interest is due to be paid, would transfer the CEL to their customers at the then-current market price.

It is normal for a company in Chapter 11 bankruptcy to continue paying employees. Celsius has filed for Chapter 11 bankruptcy, which means they are continuing operations. Companies in Chapter 11 bankruptcy will continue to pay employees for wages incurred after the bankruptcy filing.

The filing referenced in the article you cited can be found here (https://cases.stretto.com/public/x191/11749/PLEADINGS/1174909162280000000022.pdf). I don't see any reference to the proceeds being used to pay employee salaries or to fund its ongoing operational expenses. From what I can tell, Celsius is asking to convert its stablecoin holdings into fiat currency. This is something that will marginally the reduce the risk to Celsius' customers, as it will remove the risk that any of the stablecoins they are holding will implode.

This may well be true, but it is clear from the document shared that their purchasing of CEL went way beyond what was reasonable to maintain such business activity:

This may also be true, but at the same time, Brain Armstrong (for example) can't artificially pump the price of Coinbase shares just before his preset sell off date. Mashinsky, on the other hand, could absolutely pump the price of CEL by using depositor funds to buy it up, which we now know is exactly what he was doing.

The statement that CEL was being “pumped” is an allegation made without specific evidence, nor with any comment/rebuttal by the party in question (Celsius/it’s ceo).

As I noted in my previous post, I would expect customers who believe Celsius to be insolvent to act in strange ways, and this may include increasing number of customers asking for interest payments to be made in CEL tokens. I am not sure if there were limitations on changes to this election or not.

According to the declaration referenced above, there was a large increase in the net CEL position after Celsius froze withdrawals. I believe it would be very strange for Celsius to do this if not for some outside influence, such as customers electing to receive their interest payments in CEL. It is possible that this was Celsius trying to make its balance sheet look better to potential investors prior to its bankruptcy filing, but I don’t know.

Honestly, this whole thing just keeps getting worse and worse.

https://www.cnbc.com/2022/09/23/celsius-has-a-hail-mary-bankruptcy-plan-turn-its-debt-into-a-new-cryptocurrency-.html

Excel. They were running their entire business using an Excel spreadsheet, which was being manually updated. Billions of dollars worth of assets, and all their acquisitions, sales, and loans being tracked by a person entering the figures by hand in to Excel. Unbelievable.

And now they plan to release a new token to compensate their users, and let the "market determine its value". A new scam built on top of a previous scam built upon a company ran by grade schoolers, apparently.

The use of excel spreadsheets is very amateurish. I am not sure I believe this to be true. A single worksheet is limited to just over 1 million rows and the number of worksheets is limited to the available RAM on the computer accessing the workbook (the excel file). With 300,000 customers, I cant imagine excel being used exclusively for their business, and it is simply not reasonable for records for 300,000 customers to be manually updated regularly. I think it is far more likely that SQL (or some other database software) was used, and reports were output in excel format.

---

I actually like the idea of tokenizing their debt. Based on what I read in the article, customers who had BTC on deposit with Celsius, would receive an equal amount of "wrapped BTC" that can be exchanged on a DeFi platform. At the conclusion of the Celsius bankruptcy case, the "wrapped BTC" would be redeemed for actual BTC at a ratio that is dependent on the total assets, (and total valid claims) available (and made against) the bankruptcy estate. A similar procedure would be used for the other various altcoins that Celsius accepted for deposit.

There are multiple problems with the above. The biggest problem is that it would not treat all creditors equally. For example, those who have collateral being held by celsius, who have not yet repaid their loan would not be given these tokens (doing so would not be protecting the assets of the bankruptcy estate). A second problem is that claims are judged by the bankruptcy court, not by Celsius. If someone makes a claim that they are owed money by Celsius, the bankruptcy estate and/or other creditors can object to this claim if it is unsubstantiated.

So, Celsius CEO Alex Mashinsky decided to resign from his position and he continues to bullshit in his letter of resignation. Good riddance, but unfortunately its too little too late.

It is possible that Mashinsky was being questioned about decisions he made and in lieu of answering the questions, he decided to resign. At least one regulator is saying that Celsius had multiple financial setbacks over the years. Celsius was a bank, and the business models for banks really do not allow for you to even be in a position to possibly have major setbacks.

I understand the operating losses, as they are likely the result of mispricing and/or a mismatch of deposit/lending volume. Having "one time" events is really more concerning to me.

There is an article that was published in a mainstream media outlet saying that Celsius executives have withdrawn at least $17 million of their money before freezing withdrawals for their customers. However, this is not the only problem. It appears Celsius has also made public a court document containing all their users' names, transaction times, and amounts of deposits and withdrawals. This is certainly a very serious breach of privacy.



Gizmodo has uploaded the latest Celsius court filing, which totals over 14,000 pages, to the Internet Archive for anyone who really wants to get into the nitty gritty of the bankruptcy case. It appears the filing is so large because it seems to have the names and recent transactions of every user on the platform.

Source https://gizmodo.com/celsius-execs-cashed-out-bitcoin-price-crypto-ponzi-1849623526

And that document could be accessed at https://ia601401.us.archive.org/28/items/celsius/celsius.pdf (https://ia601401.us.archive.org/28/items/celsius/celsius.pdf). It has 277M size with total 14532 pages, which means you might have performance problem when opening that PDF file. I only spend few minute, but i saw coin transaction ranging to few cents to almost 1 million USD. I expect analytic company already parse this PDF as additional marketing data.

That list of Celsius users is definitely legit. I checked it earlier today and I managed to find a couple of my friends that I know have money stuck in Celsius. Even though addresses have been redacted, it sucks big time to find yourself on that list and I definitely wouldn't like to be in their spot. And it proves once again dangers of doing KYCs all over the place as you never know who and how its going to be leaked.

What an incredible shitshow.
I am translating a tweet from my fellow security researcher Riccardo Masutti:


Original source (in italian)

https://twitter.com/RiccardoMasutti/status/1578337874042580992

Is this really a "leak" or it was meant to be released like that?
https://blockworks.co/celsius-exposes-user-information-in-public-court-docs/

Seems like there was a motion (https://cases.stretto.com/public/x191/11749/PLEADINGS/1174908032280000000088.pdf) to redact every personal details that might be a breath of privacy or put a debtor at risk, but seems it was declined and only private home addresses were redacted from those pages.

I am sure every IRS equivalent is just drooling over that list, nice start for them to find out some that haven't declared a penny in crypto earnings, I managed to find a friend's name on that list, he's a sitting duck, with that name which is quite unique even here in our country not to mention he has even his third name there I wouldn't want to be in his shoes right now.

that pdf with everyones name/entity reminds me of the mtgox leak.. doxxed everyone, basically.

shitshow is an understatement.

Damn, is that true ?
Even I heard that Celsius made a court document public which had 14000 pages worth information about their users details which included transaction details as well as KYC details.
That is a huge security breach. I wondered why did Celsius did that but I didn't know that it has also withdrawn $17 million from their funds.
Seems like an exit scam.

I have not entered the cryptospace when Mtgox had their own leaks and problems. However, I read some articles and I have heard about some people's bad experiences.

Also, agreed! It is a big understatement. It is a breach of privacy and those users will certainly be in a list somewhere for scammers and darknet criminals. The IRS and other government agencies might also be studying the list hehehe.

It ducks for those involved, but as noted above, the release of the names/transaction details was intentional and was required by the court. Celsius attempted to have the information redacted. One might argue this to be one additional reason to not use these types of crypto “banks”.

With regard to the withdrawals by executives, context is needed, and there is the potential for an explanation that is not scammy. With that being said, the coin withdrawn may be subjected to clawback by the bankruptcy court.

One night note that if the personal information was not released, it would be unlikely that anyone would know about the withdrawals by executives.

Whether it's leak or mandated by court, it's privacy disaster for all Celcius customer.


I agree, although currently exit scam/other scam behavior is most probable guess.

@ETFbitcoin. Agreed. It might not be something that was intended to be a leak, however, similar to a real leak, it is still a breach of privacy.

We would also never feel the negative effects of this breach because our names are not in the list. However, if they were, I am quite certain none of us would question that the information in this court filing will potentially put some people's lives in danger. I am not only talking about the names and details of the people in the list. I am implying that it has also become known by many financial institutions that those people deposited their money in a ponzi like Celsius. An example of a negative effect would be a drop in their credit rating and make them disqualified to get a mortgage or a loan. It might also appear during a background check if they apply for a job. They might be considered high risk.

I initially thought it was a leak as well based on some wrong wordings I read in crypto-related news, but after talking with o_e_l_e_o about it in a different topic, I understood that the court requires it as part of Celsius' bankruptcy proceedings. Unfortunately, court documentation needs to be public. At least the addresses have been removed, which is a small positive in a sea of negative.   

Celsius is to be blamed for the bankruptcy.
Its customers are at fault for trusting them with their money.
And the court is responsible for making all data public and available for the whole world to see and use any way they want.

Huh, people are getting creative with that file so someone made a website that shows how much each person has (had) on Celsius and even made leaderboard according to which top loser had ~40 million USD.
https://celsiusnetworth.com/

 

Check Zaryn Dentzel's 7th on this list. btw. about them: https://www.newsweek.com/bitcoin-millionaire-zaryn-dentzel-beaten-fortune-stolen-masked-robbery-cryptocurrency-1645550

this is even more twisted though
I find on Reddit https://cases.stretto.com/public/x191/11749/PLEADINGS/1174910062280000000005.pdf
on the 34th page, click on the first letter of your first name. it will open new documents where you can find your name. Of course, all Celsius users which passed KYC and with some value on the account.
addresses are redacted, but it seems that it is not difficult to connect them with real owners.

Now I even see people posting random tweets with real name of people and amount of money they lost in Celsius, this is getting more crazy every day.
You can also see clear steps how crypto influencers like Maren Altman (crypto astrology girl) and Crypto Lark got paid like 15,000 per month for shilling!
I bet you can find all kinds of juicy information in this 14000 pages long document ;)

Oh nice, so this is the website they are using to post tweets about money they lost.
Ex-Rich list is big, and there is even one Japanese guy :)

Yep, number is constantly changing. That guy on the top has ~2080 BTC in there, which means that his total deposit was much higher at one moment, USD wise. To think that someone would send that amount of bitcoins to a third party platform for a measly 9-10% APY is beyond me, but I guess he thought it was easy money so why not and few of my friends thought the same.


Someone decided to make it easier for tax service and those who plan $5 wrench attacks. :P


I sure hope that they didn't put their whole portfolio there and that is just a fraction of what they own, but I saw some people having like 10-15 different cryptocurrencies deposited there so some might have used Celsius as a cold storage.

I don't get the  "even", aren't they allowed to have coins, get tricked into scams, or lose their money?
Besides, he might not even be Japanese, one grandfather is from Japan, and the rest are all Brazilian or Irish, or Turkish  :D

But seems like there are "lucky" guys also, that probably didn't put all their money there, clicking the random button I stumbled upon this:

https://talkimg.com/images/2023/05/20/blob1d480e55ebcb7c24.png
I think he is one of the ones that will find it easy to get over the loss.



This one is going to be interesting, especially since the robbers were never caught, he claimed millions in lost coins and he still somehow managed to hide despite being under torture at least 15 million. Pretty sure the police will find this also quite interesting, and the IRS also.
https://www.europeworldnews.com/changes-in-the-official-statement-from-the-founder-of-tuenti-cast-doubts-on-researchers-about-what-happened-to-the-alleged-theft-of-their-btc/

There might be other names in the list that might be very disappointing to see for the bitcoin community if the data are true. Does anyone know Jason Lowery? I saw him being mentioned in social media as a laser eyes, there is no second best, never touching shitcoins type of holder. It might only be a person with the same name, however. We cannot be certain with less known people.

I found this screenshot in social media. A similar search would give only $0.55 lost.

https://i.ibb.co/znqCxXc/2-DD6056-D-FB22-423-C-8-A99-720-A11251306.jpg

Well, according to info from that website he only had bitcoin on Celsius, so I guess he didn't touch shitcoins.  :D



He confirmed it on twitter that it was indeed him, but he also said that $56k amount was a wrong calculation and that he actually had only $0.56 worth of bitcoin on Celsius.

https://i.postimg.cc/TwPj28kB/Screenshot-2022-10-11-at-09-17-52-Jason-Lowery-on-Twitter.png
https://twitter.com/JasonPLowery/status/1579587441799106560

@Rikafip. Yes it appears that some people in social media are overexcited in discovering some known names in the list hehe. There were also other names in the list that had similar names with some known maximalists in the bitcoin community like John Carvalho and Jonas Schnelli. Peter McCormack was also very quick in criticizing Carvalho with the wrong information hehehehe.

Clawback:
I am extremely afraid of clawback stuff. I wonder how probable it is. And if there is presidence.
I am happy to give back all my yields. Giving them all my principal would ruin me. Especially cause i went from Celsius to ftx.
I am literally having a panic attack here.
How would that look like. I am non-us citizen in europe.

I doubt that there would be distinction between principle and yield, but there would largely be a look at whether the transaction was made within the 90 days prior the bancrupcy filing - and yes there is precedence for clawback, but it might not be easy for clawback to occur with all jurisdictions, and sometimes they would be threatening to take legal action.. but may or may not be able to actually successfully take legal action (and it may not be worth it for them to actually follow through with clawback legal action, except maybe transactions of a certain size).     

I doubt that you need to worry as much as you are dramatically proclaiming that you need to worry, even though with any case we sometimes need to prepare for any possible scenario, even worse case scenarios - but people go crazy and even come to the wrong conclusions and actions when they dwell on scenarios that are less likely to happen prior to the scenario showing solid evidence that some variation of it could end up happening.

There is clearly precedence in Chapter 11 bankruptcy filings for non-crypto financial entities. As far as I am aware, Celsius will be the first time such a law has been tested for crypto.

This raises some very interesting points. Given that FTX is now insolvent, you can prove you do not have access to the funds. Or what if someone withdrew from Celsius, deposited to FTX, and then withdrew the same capital from FTX? There would now be two different entities both trying to clawback the same funds. Very messy situation indeed.

Given that you are a non-US citizen, Celsius would likely have to pursue you through the legal system of whatever country you reside in. This would be both a lengthy and costly process for them. Unless you withdrew crypto worth millions of dollars, it probably isn't going to be worth their time to come after you.

Well, the dominos have fallen and Celsius is amongst them.  Even if they make it out, unfortunately, the investors will be screwed as usual.  Oh the perils of centralization and the tangled web they weave.

Can anyone help? Celsius has sent notification on smartphone regards the deadline to submit a proof of claim on the court (January 03, 2023).

I don't know if I have to do something. On the official Stretto's list of customers my name is there within the amount of bitcoins I had on my account at the moment of the bankruptcy.

On Twitter people said if your name is on that list you have to do nothing, but I'm not sure and would like to hear more opinions.

From what I understand, if your name is on the list (which you said it is) and if the amount you had at the moment Celsius declared bankruptcy is correct, you don't have to submit proof of claim. Just to add that I don't have money there and its purely how I understood it after talking to some friends that have money stuck on Celsius.

No matter what people on Twitter or anywhere else say, check with official sources and ask experts who are responsible for this case. My guess is that you can contact Stretto support from https://cases.stretto.com/celsius, explain to them what message you received on your phone, mention that your name is on the list, and ask if you need to do anything. That way you will be certain you are doing the right thing.

If giving money back to both Celsius and ftx would make you insolvent, you are unlikely to be required to go into debt to repay both bankruptcy estates of Celsius and ftx.

Even if you were required to repay certain amounts withdrawn, you would likely not be required to repay the full amount. Rather, offsetting would likely be used so you repay what you would have been clawed back, minus what you would receive after assets are distributed.

My suggestion is to contact a qualified attorney who can give you advice for your specific situation.

They have already sent 2 paper letters and the most important message is I have to do nothing  ;D

If anyone here also withdrew crypto in the 90 days before CELSIUS went down, like me, there is a risk of getting sued for that money from the bankruptcy estate (‘CLAWBACK’). Sounds like a bad joke, but that seems to be US bankruptcy law. I’ll take guidance from the big clawback telegram group with some professionals in them on how to defend against that. If you withdrew more than 10k worth of crypto in the 90 days before the Celsius' Fall i want to motivate you to go to this big telegram group and read the Stickies:
https://t.me/+My2UN1PsHWVkZjcx

edit:
1,5 minutes about Retail Clawbacks in Celsius from video from Aaron Benett from a few hours ago:
https://youtu.be/FNoyhDCJbwM?t=282

Your post comes off as a bit scaremongery... reminds me of the panic now, omg,  emoji..

If you had not thought about it, you can also talk about those kinds of ideas in this thread or even create another thread on this forum for such topics.. rather than referring forum members to an outside group... or even to refer to some group that might have some potentially questionable OPsec issues.

I am not going to deny that substantively "claw back" could be an issue for some Celsius account holders who might have withdrew relatively large amounts of BTC (or other crypto  - shitcoins or cash)..  In that regard, the bigger of a player that such Celsius account holder would have been, then the more potential that such larger withdrawals could be subject to claw back... and on a personal level, I believe it would be way better to have had withdrawn from Celsius.. even if potentially subject to receiving some kind of a clawback notice or even a legal document.. rather than to have not have had withdrawn and to have my coins stuck in bankruptcy proceedings.

The clawback issue is not as BIG of a deal (depending on personal details.. ) as having funds that are currently not able to be withdrawn because of bankruptcy proceedings.

Also, consider where you are at?  How easy is it to serve you with notice?  and how likely will you be pursued?  consider your behavior and how you had withdrawn.. was it less than $10k less than $100k more than a $1million?.. was it right before they shut off withdrawals or more than a month beforehand?  You are not necessarily engaging in strange behaviors if you are acting like a regular client, but of course details could make a difference in regards to whether they would actually even serve you clawback notice or even go to the next step of pursuing your legally in order to claw back however much that you may have ended up withdrawing before or as the Celsius scammening ship was sinking... and I am not going to even assume that you were enlightened in your withdrawal .. since you had been considering that it was a good idea to be earning yield on your money.. was it dollars? bitcoin? or some shitcoin(s)?

Hey there JayJuanGee,

i think i agree with you.
Yes, i want people who withdrew more than 10k from Celsius in 90days before it went down to look into this.
Cause these people to be motivated to go to this group, because:
it's the one telegram group with over 1300 members that are all in the same boat - in risk of Clawbacks from Celsius. I think it's more efficient to have all the right people in one place, not in several. And i think there is strength in numbers. I was motivated to make a post here with that info - that there is a risk, and that there is a group, Thanks

It would probably be better if anyone who is potentially at risk of having funds "clawed back" by the Celsius bankruptcy estate to seek individualized advice from an attorney. Joining a telegram group is not going to have many upsides, and there is the risk that you will be known as someone who owns(owned) a large amount of crypto.

---

I think the risk of having funds clawed back is real, especially for those who have withdrawn large amounts of coin before the bankruptcy filing. It is very well possible that the bankruptcy trustee will decide that pursuing clawback claims is not worth the additional expense, as litigation is not cheap. Hence, why it is best to seek individualized legal advice.

I am not completely against the idea of "legal counsel" or even the counsel of a professional "accountant"  or even the counsel of a professional psychologist, but we can also study into the laws and practices and to figure out some of these standards for our lil selfies, especially if we have some value at stake then we may well be more motivated to look into specifics as they pertain to our situation and we also may be more willing to share our findings with other people.. including in forums like this.. .. and there are surely public legal (bankruptcy) standards related to these kinds of matters, and I would consider that a lot of bitcoiners are somewhat self-help kinds of people that have brains for themselves.. and sure not everyone has a brain that functions well.. but still..   some of folks might already have access to attorneys and consultants, but some of them are able to figure out these kinds of matters for themselves including looking at the relevant laws, looking at their own circumstances (including where they are located and how much value that they may have taken out over the past 90 days and what were the circumstances of their having had removed such value) calculating how probable it might be that they might even receive a clawback notice... and even already have a plan in place, in the event that they do receive a clawback notice.. even if such clawback notice might well never come.

I am not opposed to getting legal advice if the circumstances might be complicated or if amounts at issue might be large and/or if the person might be in a jurisidiction in which it would be easy to serve legal notice and especially if someone has been served a clawback notice then it would become more important to act upon the receipt of such notice.. but some people might be smart enough to know what to do, how to prepare, what to research into without even having to seek "professional help".. and whether to cooperate with such claw back notice if it were to come depending on their own circumstances... or to address the clawback matter once notice is served, and if such a thing were to even be served.  

I am part of this forum and participate in this forum because I believe that there is value in learning and sharing information with forum members, and I am not as excited about referring members to outside locations (such as a telegram group).. and in that regard, I have my doubts regarding how private telegram may be.... but I don't know and then also, sure I may agree with you PrimeNumber7 that even if we do get into actual legal strategizing, then we are then going to be strategizing with a lawyer and/or accountant rather than posting any of our specific legal strategies on a public forum unless we believe that we are somewhat anonymous and we are not necessarily revealing too much of our personal details or circumstances or giving ourselves away more than necessary.  

For sure it should be seen as a problem that there is already a public list of Celsius names and other details.. so surely that causes issues with real names (or whatever name a Celsius account holder may have used in terms of his/her Celsius account).

Furthermore, if many folks are scared that "maybe I will get a clawback notice?" and no such clawback notice is even pending or even likely, they might be getting very worked up about something that is not likely to happen, they may well not need to seek legal help, help from an accountant or even psychological help.. and they may well be able to figure out some of these strategy matters by sharing information on forums and also by looking up information, too.... and merely having some supra $10k transactions in the past 90 days or amounts that add up to $10k would hardly even worry quite a few people.... .. so yeah there are some devils in the details kinds of considerations that could cause clawback notices to be more likely for some people versus others.

My biggest concern about the telegram group is that it may be intended to get the person information of people who have large amounts of coin. I don’t necessarily have any problem with people sharing information with one another via the forum or some other medium. However when it comes to legal liability, sharing information can sometimes be harmful to you because it may make you a target, or you may expose information that would make a plaintiff believe you have assets to pay a judgement for example.

With regard to clawbacks in the Celsius case, if hiring a lawyer would be a financial burden, chances are that you don’t have much to worry about because a lawsuit by the bankruptcy estate won’t be economical.

In the end, I probably don't really disagree with you on any of this, and I think that I was initially triggered by Roccker's referring members off of the forum.

Now I'm just waiting for an update. I've received a physical letter from Stretto containing how much I had in Celsius and the status of my claim appears as "General Unsecured". As I understood it's everything ok and I don't have to fill any other claim. They also mention the deadline announcement (January 03, 2023), although the thieves from Celsius want to postpone the deadline.

Besides that, there is a complete manual with every other details about the claim (who needs to fill it, how to, where to, who doesn't need...), more informations about the deadline, who are the debtors (total of 8 Celsius' companies) and every respective addresses and phone numbers.

I don't know if Simon Dixon on Twitter is being optimistic, but he says we can expect more than 50% of our funds back in 6 months. However, Celsius can't have a reorganization plan permission from the judge.

That would be the 1st time I'd get non 0 value from a bankrupt crypto platform  ;D

News update. The judge ruled that all the cryptocoins that were deposited in Celsius were the property of Celsius. The company does not need to send their depositors back their money thanks to what was written in their terms of use. This quite represents not your keys, not your coins.



A federal bankruptcy judge ruled cryptocurrencies deposited into interest-bearing accounts at Celsius Network, a now-bankrupt cryptocurrency lending platform, actually belong to the firm — thanks to the fine print.

The verdict gives Celsius ownership of the $4.2 billion in cryptocurrency that users deposited into its high-interest Earn program, according to a 45-page filing from the U.S. Bankruptcy Court in the Southern District of New York on Wednesday.

With the Earn program, Celsius allowed users to deposit cryptocurrencies like Bitcoin, Ethereum and Tether and receive weekly interest payments. Depending on the time horizon and token, the platform offered as much as 18% interest annually.

Source https://techcrunch.com/2023/01/04/bankruptcy-judge-rules-celsius-network-owns-users-interest-bearing-crypto-accounts/



Also, 18% interest annually, I am not quite certain what type of ponzinomics a centalized service used to pay for 18%, however, this is very common in Defi with autocompounding, velocking and other types of ponzinomics strategies.

Wow.  Let's see where this goes, but it surely shows the importance for customers to read the terms of service - especially if the terms of service describe that the customers are giving up their claims to ownership over the principle, but were they also giving up claims of ownership over the purported yields?  I suppose until they actually cash out, the customer is not going to have ownership of nothing.. even though it seems that there was more than mere speculating that was going on with regards to what Celsius was doing with the deposits.. but if the terms of service says that they can do whatever the fuck they want, then the court will side with their terms of service... perhaps?  I doubt this is over, yet.. and actions that were either fraud or bordering on fraud might possibly still be relevant, yet of course, the judge would have considered those kinds of facts that were to show fraud, if such facts were to exist and if such facts that show fraud were to have been materially relevant in making the ruling, right? 

right?


right?

For most of us it's game over! Disgusting...

But for New York's investors there might be hope yet, because the state of NY is suing Mashinsky now.

https://twitter.com/NewYorkStateAG/status/1611023481285578752?t=VhRfgMXeVW7S9IDb1F9jog&s=19

This judge is siding with the scammers. The fraud was clear and the case easy to be solved. The judge, after a long time, decided to use a dirty, shady and malicious term and conditions' point as excuse to legitimate the scam, while completely ignoring Mashinsky withdrew funds (CEL tokens I think) right before the bankruptcy announcement. Remember he also tweeted asking a man to show evidence of a single user who was having issues to cashout from Celsius on the day before the freeze.

If it's not premeditated fraud, I don't know what it is anymore. The judge simply chose to turn a blind eye to this.

Congratulations to the scammers! They proved the crime worths! But from divine law they can't escape!

It is almost certain that users will not get a refund after the company goes bankrupt, this company's work system is almost like a conventional bank because customers do not hold assets, more clearly what Celsius the company is trying to do is not attractive at all, because they use stablecoins in holding assets and the importance of reading the rules in full so that everything goes better before going any further.

For several reasons, it is very likely that users will become victims of the bankruptcy of the Celsius company, so that whatever form of assistance is provided, it will not affect the company's return.

The ruling really doesn't change anything. It essentially means that any coin deposited to Celsius is an asset of Celsius, while a liability of a similar amount is also created. In other words, depositing coin on Celsius is a wash, although if Celsius is insolvent when (or after) the coin is deposited, the person depositing the coin would be receiving a liability worth less than the value of the coin they just deposited.

There's no hope. The NYAG is not going to be able to recover any substantial amount of money, even if she wins in court.

But keep in mind this is a new situation. NYAG is suing Mashinsky, not Celsius. They will go after Mashinsky's money and he will be banned from doing business in the state. Although this measure can only benefit local investors from the state, it can still work, why not?

News update.

Celsius next plan is to issue their own token and create a market for this to be traded and speculated. I am not quite certain if this will a type of ICO, however, they will certainly need to have whales to help them with the initial investment to pump then dump on the market.

It appears the people who will pay for Celsius way out of bankruptcy will be from the community.



Celsius is weighing a crypto bankruptcy token to pay back creditors in reorganization

Celsius is weighing a plan to repay creditors by issuing a new cryptocurrency, the lending platform said in a Tuesday court hearing.

Source https://markets.businessinsider.com/news/currencies/celsius-crypto-news-bankruptcy-creditors-token-repayment-bitfinex-court-2023-1

Hahaha what an absolute scam. "We gambled all your money away to make profit for ourselves. Now give us more money so we can gamble it too and try to make back what we lost. We will pay you back with a complete centralized worthless shitcoin that we can print out of thin air!"

Handing a single satoshi back to Celsius' centralized scam platform is just plain stupid. Doing it in return for a centralized bankruptcy shitcoin is absolute lunacy. If anyone falls for this, then I'm sorry, but you are a moron.

There are also potential legal issues here, in that by buying said shitcoin you could be classed as having accepted some kind of settlement deal from Celsius and therefore giving up your rights to taking legal action for your original coins that they scammed from you.

@o_e_l_e_o. They are following Bitfinex's tactic when it was hacked for much of their bitcoins in cold storage. The difference however, is Bitfinex had a community of loyal traders that supported the exchange and has shown this support through buying the tokens during the presale. This gave Bitfinex the cashflow to give the exchange more time to wait for the markets to pump and close the blackhole in their balance sheet. But I am not quite certain what type of magic was done by their accounting department hehehe.

Based on the article, (and based on how bitfinex handled a similar situation), it looks like Celsius would issue one token to their creditors for each dollar the creditor is owed, and creditors would be able to sell the tokens on the open market to allow them to quickly recover something. I might compare this to a "normal" company allowing its bondholders to continue to trade a bankrupt company’s debt on the bond market, except in the case of celsius, there was no existing market prior to celsius filing for bankruptcy.

Presumably, celsius would also use a certain percentage of its operating income to repurchase these tokens at face value periodically. The article alluded to Celsius becoming a public company, so it may also be possible for tokenholders to convert their tokens to equity shares in Celsius at some predetermined value.

Celsius shouldn't be able to exit bankruptcy until all the tokens are disposed of, either via being redeemed at face value or being exchanged for equity. Although at one point, the bankruptcy court may mandate that token holders accept equity in exchange for their tokens.

I assume that hedge funds and others are currently trying to buy up bankrupty claims from creditors at below face value, so there are advantages to allowing for there to be an open market for these claims.

The scammers have 4.2$ billion under their disposal. They just have to be creative to continue buying more time through these useless recovery strategies, until they deplete all the funds available.

And considering that sum of money, it's a very decent amount to run a pump and dump scheme with a new worthless token, what doesn't make sense anyway, since they already had native CEL token, and still profiting the biggest part of that through their wealthy wages, after all!

---

Let's say they owe me $1000. So I will receive 1000 worthless tokens which nobody is going to buy for a single penny of dollar each, because this token doesn't have a practical reason to exist, besides scamming money from creditors.

The only solution was to sell all the assets and return the profit made to creditors in something with real price, like bitcoin or dollar currency. If depositors were able to get 40%-50% of their funds back it would be already considered a victory. Now I doubt someone is going to recover at least 10% of their holdings with this plan.

As you say, the difference here is that Bitfinex were still operating. As insane as I think it was for Bitfinex users to accept payment in a centralized shitcoin, at least Bitfinex had some kind of strategy to recoup their losses and pay back their users. Celsius have nothing except a scam coin built from the ashes of a scam exchange.

A very similar situation happened with Midas, which was yet another centralized platform which collapsed a few months ago. They "paid back" all their scammed users in their own centralized Midas token instead of the BTC and other coins they were owed. Everyone immediately dumped this worthless token and recovered very little, if anything, of what they were owed. Zoom out to three months on the chart and see if you can figure out just when this happened :D - https://coinmarketcap.com/currencies/midas/

Oh my God, it looks the view from the bottom of Grand Canyon! :D :'(

The token would exist to repay creditors, and would represent a claim against Celcius' assets.

Celsius is currently in Chapter 7 liquidation bankruptcy, the idea is that it would change to Chapter 11 bankruptcy and would resume operations.

There are presumably already hedge funds, and other entities buying up claims from former customers, this token would make the pricing of the debt more transparent.

That is trickery from Celsius.

Creditors don't want to be paid with this token. Creditors want another plan for Chapter 7, so this company can be finally liquidated, all the assets held sold and the profit given to creditors (in bitcoin, preferentially, or dollar) proportionally to their holdings on the platform.

There isn't a reason for Celsius to resume their operations, since it was proven it's not a legit business. What happened previously would happen again futurely, if they resumed operations.

I still don't understand what is the point of having a worthless token as middleman on this negotiation, besides it being sole trickery from Celsius.

Hedge funds and other entities pay in btc, and btc is transferred to creditors. No tokens are needed on the process.

Celsius is thoroughly a ponzi. We cannot be quite certain if this was being done from the beginning, however, Celsius used the money from their customers to pump CEL tokens and customer withdrawals were funded by new deposits. This is a pyramid ponzi very much similar to those give us money and we double it in 3 months scam.



Dean Happen, coin deployment specialist at Celsius, noticed that customer funds were being used to fund CEL purchases. In January 2021, he said internally that his title at Celsius should be “Ponzi Consultant.” And last year, Tappen called Celsius’ practice of using customer assets to fund CEL purchases as “very Ponzi like.”

The examiner found that Celsius didn’t have enough liquidity to cover future withdrawals in the period leading up to its withdrawal pause, and that it had to rely on new customers to fund further claims. This would be typical of a Ponzi case, but the examiner didn’t explicitly state that it amounted to one.

Source https://blockworks.co/news/celsius-execs-joked-that-investors-thought-the-cel-token-was-going-to-the-moon

Celsius announced earlier today via Twitter that certain amount of users will be able to withdraw 94% of their assets, while court will decide about the rest 6%. Here is the list of those who should get (part) of their money out https://cases.stretto.com/public/x191/11749/PLEADINGS/1174901312380000000181.pdf. It seems like only those that had up to $7,575 and additional criteria (full list of criteria is in that link) are eligible for withdraw so I hope some of you that have money there meet those. Few people I know that have money stuck there unfortunately don't.

https://i.postimg.cc/bNVRGsVK/Screenshot-2023-02-01-at-11-07-43-Celsius-on-Twitter.png
https://twitter.com/CelsiusNetwork/status/1620627975388696576

Additional criteria is to have the money in a "custody account', instead of an "earn account", what means these people who are going to receive their money back had their funds idle on platform, simply using it like a wallet, while the majority of users had their funds in earning mode for interest income.

The amount of money Celsius is going to pay back to custody accounts' owners is insignificant on the bigger picture.

The tokens allow creditors to trade their claim against Celsius in a transparent way via an open market. The tokens would eventually be redeemed either for cash in the event of a liquidation, or for equity in the event that Celsius emerges via Chapter 11.

This isn't something for creditors to decide, nor for you to decide. If management can show the bankruptcy court that it can operate on a profitable operational basis, the bankruptcy court will likely allow for the case to be converted into a Chapter 11 reorganization case. My understanding is that Celsius had a small number of one-time events that caused it to become insolvent. I also understand that it mispriced both interest on deposits, and interest charged on loans, although this was likely to prevent a run on the bank.

As it stands now, anyone buying up claims from creditors can do so without the creditors knowing with certainty what others are receiving for their claims. It may be hypothetically possible for someone to be willing to offer $0.25 on the dollar for claims, but will initially offer $0.20 on the dollar, and will make a subsequent offer of $0.22 before finally offering $0.25. An open market for tokens will allow creditors to have more information about how much others are receiving for claims.

This does not need to happen via an open market. Celsius are liquidated, and the court assigns whatever assets remain between all creditors. Celsius adding a centralized scam token to this process brings little benefit for their users.

This is dependent on them convincing the courts that they have a viable operation to resume. And given that they were operating as a Ponzi for many months before declaring insolvency, that might be a difficult task

Perhaps. But they also operated as a Ponzi for months while insolvent, lied to all their users, used users' funds to pump their shitcoin, all with Mashinsky making sure to cash out his own profits prior to the bankruptcy. They are rotten to the core.

I really would like @PrimeNumber7 were right on this one, but it seems the roots of the issue are much deeper than a small number of one-time recent events.

---

Unfortunatelly the court didn't consider these tweets as evidence of misleading advertisement from Celsius and Mashinsky, which directly contradict those terms of them used by the judge to decide money from depositors belong to the company. Maybe there is still hope in the case NY Attorney General is moving against Mashinsky personally, although that is not the kind of expectation I nourish regards justice system anymore.

https://pbs.twimg.com/media/FoF-j7pXEAA7SK4?format=png&name=900x900

https://pbs.twimg.com/media/FoE7Bj6WYAIufhv?format=jpg&name=large

https://pbs.twimg.com/media/FoFeMTRWAAID1Ro?format=png&name=900x900

Unbelievable that people would ask him on Twitter, but not actually bother reading the Terms of Use. I pointed out several years ago (https://ninjastic.space/search?author=o_e_l_e_o&content=celsius+terms) that their Terms of Use quite clearly stated that you got absolutely nothing back in the event of something going wrong.

Hell, their Terms of Use are still live on their website:

So, in summary, all your assets are at risk of partial or total loss, you have no rights of ownership, and your coins are not recoverable.

But who to believe!? Mandatory legal documents or a tweet saying "fUnDs ArE sAfU". ::)

Also, the size of those accounts that can withdraw are those that are only up to $7575. This and how much in total was stored in custody accounts implies that the money Celsius will be paying back is more insiginificant than insignificant. They also only need to pay 94% of this hehehehe.

How much does everyone speculate Celsius will pay out? I reckon less than $10 million. We can assume that being a ponzi scheme, Celsius does not have much of the money anymore. They are in offshore bank accounts, Swiss bank accounts, went to Tornado Cash, swapped in Defi and held in Monero.

The benefit is that creditors would not have to wait for the bankruptcy process to play out. If someone needs money today, they can sell their claim by selling their tokens. It is already possible for creditors to sell their claims today, but the pricing is opaque and it is difficult for sellers to know what buyers are generally willing to pay for their claims. So this token would improve transparency.

Celsius had mispriced interest rates for both deposits and loans. The likely reason for this was to prevent too many people from wanting to withdraw, so they could continue operations.

Mashinsky would presumably not be running a new version of Celsius, nor would most of the high-level executives/management.

Celsius is essentially a bank, and there are many banks that have a long history of being able to operate profitably.

You were very close with your prediction as according to the article below, Celsius is supposed to pay out ~$11 million worth of crypto. So yeah, its a small fraction of money compared to the total amount owed.

---

Question is, how interested people would be in Celsius if they offered interest rate on par with banks, or even slightly higher? Add on that the increased risk of losing your money compared to banks and my guess is not too many. The only reason why Celsius was so popular is due high interest rate that was only possible by operating as a ponzi scheme and doing other shady stuff.

If anyone at Celsius actually cared at all about the transparency of customers selling their claims, then they could equally as easily set up a marketplace to allow customers to sell their claims on the open market in a transparent way, all without the need for a centralized scam token. The only motivation behind this token is Celsius' greed.

$4.2 billion in assets, and they pay out $11 million. 0.26%. Wow. And what about all the other 99.7% of their assets and the millions of customers who were ineligible for this pay out?

I am not sure why you believe the motivation is greed on the part of Celsius. To my knowledge, Celsius would not receive any proceeds from the sale of said tokens.

Bitfinex allows their customers to lend their various coins to the platform with the purpose of facilitating margin trading. The current APR for short-term BTC loans is 0.035% per year.

In order for Celsius to convert to a Chapter 11 bankruptcy, management would need to convince the bankruptcy court that emerging from bankruptcy as a 'going concern' would produce better value to creditors than liquidating its assets.

There's pretty strong evidence already in the public sphere that Celsius engaged in high levels of fraudulent and criminal behaviors, even if criminal charges have not yet been brought, so I doubt that there is any reason to give them benefits of the doubt that they are acting with good business intentions, unless they can overwhelminingly show their good business intentions in regards to the token that they are proposing.


Bitfinex is not involved in a bankruptcy proceeding, including they do not have a large amount of evidence showing that they had been engaging in fraudulent/criminal behaviors in recent times.

Speaking of Bitfinex, remember in about August 2016 when they got themselves in a bit of a pickle with a supposed hack, and many folks in the bitcoin community thought that they had either run off with the coins (worser case scenario) or that they would not be able to open back up due to lack of funds and lack of public confidence in them (and/or loss of confidence in bitcoin).  They created a token and engaged in all kinds of creative maneuverings that some considered to be "innovative" and other considered to be manipulative, including ways to more subtly steal user's funds, but they were down in August 2016, and they were back running about a month later, and paid back the at-issue haircut coins by April 2017... They are held up as an example of "one way of doing it," even though for sure they had more flexibilities in what they had done because they were not in bankruptcy proceedings and they were mostly not under any other kind of direct supervision or even in the grasp of supervision (such as criminal proceedings)..


I agree with you on this point, and there could be ways that a conversion from Chapter 7 to Chapter 11 would be better for creditors.. and there should be a decent amount on Celsius to employ evidence and a good plan - the token sounds fishy on it's surface, but there could be a way in which it might be presented as a viable option and a preferable route forward, though I have quite a few doubts that Celsius would be able to convince a judge of such.. but hey, never say never.. I surely don't know enough details to realize that there might be some pieces of information and argumentation that cause such token to be more legit than it appears to be.

Calling it a small fraction if compared to the total money they stole is downplaying it from what they really owe hehehe. It is not a fraction. It is a small drop of water in a wide ocean. According the court filings, Celsius owes $4.3 billion to customers.

$11 million is only .26% of $4.3 billion.

In any case, I am quite certain Swiss bankers are very happy accepting Alex Mashinsky's deposits.



Celsius ended November with $9 billion of liabilities, including more than $4.3 billion owed to customers, a court filing shows.

Source https://www.reuters.com/technology/new-york-sues-celsius-network-founder-mashinsky-alleges-fraud-2023-01-05/

I don't see how I downplayed it by writing "a small fraction", but if we are nitpicking then I could say that you are downplaying the amount that will be paid out because one drop of water makes considerably less than 0.26% of any ocean, or even a bottle of water.  ;D

They don't need to. An example:

Celsius owes you 5 BTC. Instead, they claim that 5 BTC is equivalent to 5,000 CelsiusScamTokens, convert your 5 BTC debt to 5,000 CST, and credit your account with 5,000 CST. Celsius have therefore just profited by 5 BTC by erasing the debt they owe you, and instead paying you in a made up shitcoin they just created out of thin air. They don't care what you do with your CSTs. They don't care that the market for them will crash to almost nothing very quickly. They have erased the debt they owe you, and so they have made a profit. Bonus points for them in that by you accepting this settlement, you can no longer sue them or join a class action lawsuit against them.

And in terms of the argument that this was a series of unfortunate events for Celsius: https://tokenist.com/celsius-network-was-selling-its-users-btc-and-eth-to-prop-up-cel-token-report/

This is deliberately malicious, not to mention completely illegal. Used coins belonging to customers to prop up the CEL market so that the top execs could dump their bags before the whole thing collapsed.

The definitions of perfect crime were updated with success!  ;)

Okay this is not a small drop on a wide ocean, however, this is still very very very very very much a small fraction of $4.3 billion and those hustlers in Celsius know that they are certainly going to get away with this.

I am not certain if these articles saying that Celsius has been insolvent from the beginning but appears the truth is coming out.



A new report by Jenner & Block attorney Shoba Pillay, the bankruptcy court-appointed Examiner of Celsius, claims that Celsius “on a stand-alone basis has been insolvent since inception.” The report, which centers around Celsius’s native token, argues that the crypto lender used CEL as the centerpiece of a scheme to enrich executives at customers’ cost.

Source https://tokenist.com/celsius-network-was-selling-its-users-btc-and-eth-to-prop-up-cel-token-report/


It was a ponzi scheme from the beginning.

That is not how I read how the token would work.

From what I understand, if Celsius owed someone 5BTC, they might convert that to 5000 token units, and give you 5000 token units that represent your 5BTC claim. If you held the 5000 token units, you would have the same claim as you previously did, but if you were to sell the token units, you would be giving up your claim and would be transferring the claim to whoever buys the token units.

Someone who does nothing with their token units would be in the same position as someone as what would have happened if Celsius had never issued any tokens. Someone who buys the tokens would have the same rights as someone described in the previous sentence.

I understand that Celsius would be unable to exit bankruptcy without satisfying the token units. This would be done either via Chapter 7 in which Celsius would redeem each token unit at the same amount, or via Chapter 11 via redeeming the token units for equity in the new company. This is the same as if Celsius had not issued any token.

I don't think you would.

You would no longer have a claim of 5 BTC, but a claim of 5,000 tokens. If the market rate for those 5,000 tokens is 0.001 BTC (given the market will immediately tank), then good luck convincing anyone that your 0.001 BTC of tokens is still worth 5 BTC. If Celsius somehow manage to transition to a profitable company (not exactly a likely scenario), then instead or paying you back your 5 BTC, instead they can just buy back the tokens for the going market rate, which will result in you recovering fractions of a penny to the dollar.

I think you are making a couple of flawed assumptions.

In Bankruptcy, Celsius will not be able to purchase their own debt, and the tokens in question would represent debt that celsius owes. Upon exiting bankruptcy, all debt will either need to be converted to equity, converted to new debt, or be repaid at a fraction (potentially 100%) of what is owed to debt holders.

While I agree that celsius debt tokens would likely initially trade for less than face value, I don't think it is realistic for Celsius to be able to repurchase large amounts of their debt at ridiculous discounts (that would not otherwise be possible) due to the issuance of debt tokens. Ignoring the above constraints, if Celsius were to start buying up their debt tokens in mass, the laws of supply and demand dictate that the price of the debt tokens would increase. Further, if Celsius were to buy up a lot of their debt tokens, it would be clear that someone is buying up a lot of their debt, however, if Celsius were able to somehow buy their debt tokens, they could also buy up their debt that is not tokenized, and they could do this much more quityly in private, which would allow them to buy at lower prices.

I would also point out that no one would be forced to sell their tokens at anything less than face value (except when Celsius were to exit bankruptcy).

https://www.wsj.com/articles/crypto-lender-celsius-names-fahrenheit-as-winning-chapter-11-bidder-40c3c3e5

An update to the Celsius saga -- it appears that Celsius is going to distribute it's crypto holdings to its customers, and will own nearly all of the new company that will exit Chapter 11 bankruptcy. A company called "Fahrenheit" will manage the illiquid holdings of Celsius.

From what I can tell from the article, it appears that Celsius is going to be effectively liquidated, and the assets that could not be easily liquidated will be managed by Fahrenheit for the benefit of Celsius customers.

For all those that have money stuck at Celsius, you might wanna know that you will be able to swao your altcoins to bitcoin and ethereum as their plan is pay the debtors in those two cryptocurrencies.

@Rikafip. If they pay hehehehe.

The skeptical is now thinking that the people who founded and created these failed Cefi lending services are really working for the government to make the cryptospace appear that it is full of scamming hustlers.

The reason for this is to make the cryptospace community divided and make it look that it is in need of a takeover by the people behind the traditional financial companies.

Well, that's not really being skeptical but rather being conspiracy theorist and I am not big fan of those.
Talking about conspiracy theories, I also heard from some ppl saying that Bitcoin was created by government in order for people to slowly accept digial currencies so its easier for them to push CBDC.  :P

I think it is exponentially more likely that they are just greedy scammers. More intelligent than you average "Enter your seed phrase on this website" phishing email type scammers, but greedy scammers all the same.

We saw it endlessly during the ICO craze. Any scammer with the ability to launch a useless ICO did just that, made a few million from the gullible, and then exit scammed and disappeared. It's a bit harder to do the same with a centralized exchange, but the gains are far greater. People like Mashinsky or SBF are exactly the type of people you can see launching their own ICO back in 2017 and promising that it is the next bitcoin killer or some other such bullshit.

The government doesn't have to go through this kind of conspiracy, if it is a centralized service they can just push for regulation and try to control it indirectly, these crypto centralized services are doing very shady things and maybe they need to be well regulated.
Even if they didn't create their business to scam people, but just with the way it is run, in the long run people are going to be scammed, these services operate through a fractional reserve system, they don't keep the money of their customers, they use it to trade or gamble, the chances are high that someday they can be unlucky and lose it; and the domino effect follows.

Former Celsius CEO Alex Mashinsky has been arrested today, along with SEC suing him and Celsius for securities fraud. About time I would say.

However, these good and honorable people from traditional finance want to maintain their good reputation and have a clean name because they are politically connected. They do not want to appear like they are the evil men who manipulated the destruction of an industry so they can takeover. Some of them might have a future in politics, their relatives might have a future in politics and their political connections are important them. They do not want to appear dirty to the public.

Similar to the Italian mafia, they like wearing suits and make it look to you that they are honorable people.

A little bit of good news for all those that have money stuck at Celsius as that they plan to start repaying its customers by the end of 2023, if approved by court and regulators. It is planned to be only partial repayment though, but at this point I guess they will take anything (at least that's what my friends that hve money there tell me).

Source: https://cointelegraph.com/news/celsius-network-bankruptcy-newco-seeks-court-approval-confirmation-hearing

Still waiting for updates... So far Celsius keeps sending emails asking users to update their accounts' profile informations with documents in order to be able to withdraw the money once they have the permission from the court.

https://www.talkimg.com/images/2024/01/13/3NOTl.png

The thing is, I've uploaded my documents, which exactly match the informations on my profile, but the platform presents an error, saying they don't match and that I have to re-upload them or contact support. Support doesn't reply. Another scam on the way? :)

---

Funds will be paid to Coinbase account. ID from Celsius and Coinbase accounts must exactly match. Skipping every shenanigans from Celsius when calculating how much money investors will retrieve, it's concluded it will be possible to recover about 30%-33% of the original funds (my doubt is, in Bitcoin values, or in dollar price on the moment the thieves' scheme gone down?).

Part of the funds will be destined to a mining business. I'm not sure, however, if investors will have access to part of this mining business' profit.

From what i read online, Celsius customers will own the stock of the mining company:
So many people are complaining about this on their social media platform X, many people can't even login to verify anything and their support is not responding. I can only imagine the situation of these people who have funds locked in Celsius since they filed for bankruptcy on July 14, 2022 and are only hoping for a small percentage to be refunded to them from what they lost.

Is anyone else waiting to receive funds back from them? Did you manage to match all your account's informations with your documents, or did you manage to get a reply from their support?

I received an email today by Stretto saying all their applications (app and webstite) are going to be shut down around February 28, next month. However, many people can't get a reply from the support (for months already) to confirm if their data is correct in order to receive part of the funds back into Coinbase account. I fear once the app and website are shut down there won't be anything else to do, and then we won't be able to receive a single penny back.

Total lack of contact with support and sharing of consistent informations. We only have access to posts on that shitpool called "X" social media, where lots of people complain about the same issue of not having access to their personal accounts, being unable to update documents or for not being replied by support. In response, there are only random scammers telling them to send private messages to other random X's accounts who would hypothetically help them to recover their funds.

I think this act of omission from Celsius company should be addressed to the legal action's process. They are maliciously preventing customers from updating and confirming their data in order to not fulfill the court's decision.

And Stretto is just washing hands. I sent them a message and they replied this:

https://www.talkimg.com/images/2024/01/28/k1wsD.png

After that, no more replies from Stretto, while Celsius has never replied. There isn't anyone else to appeal to. Is the court also going to wash hands on this?

I think the most important and sufficient thing should be matching email?

So many customers have been waiting for a response from support for many months now, but nothing yet, i initially believed they were unresponsive because of the workload of so many customers they had to attend to, but now i think they may be doing this on purpose and they do not want some customers to update and confirm their data in order to be able to receive some of their money back when they start refunding customers.
I don't know for sure, but i don't think the court would interfere in this part of the case, they would probably work with and refund only the customers who were able to update and confirm their data and so are eligible.

No. It's necessary to match legal name and birth date. And later, your Coinbase account must match the same data you gave Celsius in order to be paid.

https://www.talkimg.com/images/2024/01/29/koVYP.png

As you can see, this is the error message displayed when I access my Celsius account. However, this platform is so cunning, that they dare displaying an error message with the exact same legal name provided and legal name on the document, plus date of birth provided and on the document.

There is no error, neither a single letter misplaced.

---

Well, the point is that customers didn't update and confirm their data because they weren't allowed to by Celsius. It's not customers' fault, because they have been in touch with the platform's support for months, without any replies from the other side. There are prints which can easily prove Celsius has neglected customers in order to not pay them. But you are right, I wouldn't count on the court, anyway.

Has anyone with cryptocoins in Celsius begun receiving back those coins? According to this article Celsius has started to distribute $3 billion worth of coins and fiat. This is no small amount hehehe. I reckon this might also be one of the causes of the dump presently happening on the market. The depositors, after waiting for their coins to be returned, they will be very happy to dump them and send the fiat in their bank accounts where the money will be safe hehehehe.



Celsius Network has started to distribute $3 billion worth of cryptocurrency and fiat to its creditors after officially resolving its Chapter 11 bankruptcy, 18 months after it paused user withdrawals, the company said on Wednesday.

Read in full https://www.theblock.co/post/275461/celsius-network-starts-3-billion-payout-emerging-from-bankruptcy

Finally Celsius returned part of the money to my Coinbase account. I can confirm investors are being paid by the platform, as announced recently. Despite their support not replying in any moments, they considered the personal informations provided previously and returned 32,51% of my original portfolio. That was more or less the sum of money expected to be received, so no surprises here.

Now it seems we still have some participation on their mining business, so let's see what is going to happen next. I think the novel isn't totally over yet.

https://www.talkimg.com/images/2024/02/15/Ya6Ev.png

As you can see, part of the funds were paid in BTC and other part in ETH.