• Voyager Digital and Celsius Network announce bankruptcy
    • Crypto investors organize themselves via Reddit, Twitter and Telegram
    • Call for refund of deposited funds

    After things weren’t going particularly well for cryptocurrencies this year anyway, a real slump in cybercurrencies followed in May, which put the entire crypto sector under massive pressure. Crypto lending service providers Voyager Digital and Celsius Network also felt the effects. Both were forced to file for bankruptcy in July due to extreme market conditions. A shock for the customers of the crypto companies, who had entrusted their savings to the payment service providers and were now no longer able to access them. Even a month after the official bankruptcy announcement, it is still unclear to investors whether they will ever see any of their money again.

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    Celsius investors feel cheated

    In addition to sadness and despair, this also stirs great resentment against the crypto companies. Numerous Celsius investors are now accusing the company of having lied to them. Celsius CEO Alex Mashinsky has regularly held YouTube Q&A sessions, in which he has repeatedly assured customers that the crypto service provider is safer than a bank and has sufficient funds to always protect deposits. In fact, Celsius Network currently has a $1.2 billion hole in its balance sheet.

    Reddit, Telegram and Twitter are now used to organize the creditors

    Where months ago tens of thousands of investors in Reddit forums exchanged information about their profits from interest by lending their cryptocurrencies, the cheated investors are now forming up to discuss how to proceed together and how they could get their savings back. Reddit is not the only platform used for exchange. The short message service Twitter and the messaging service Telegram are also preferred by fellow sufferers. The Celsius and Voyager customers benefit from the fact that the crypto community had a very lively exchange even before the insolvency wave.

    Many of those affected by the Celsius bankruptcy have already agreed to write letters to the bankruptcy judge to request the return of their deposits, according to the Stretto court documentation page. Many new letters are still being added every day.

    Crowdfunding for proper legal counsel

    In addition, the creditors organize themselves via the Reddit, Telegram and Twitter groups in order to raise enough money to be able to afford legal advice. Each group member pays as much as they can into a common pot, which is then used for legal representation. David Little, one of the organizers of one such Telegram group, told Bloomberg: “It was just a crazy group of strangers who experienced the same loss of their savings and said, ‘Let’s work together’. Without this crowdfunding approach, we wouldn’t have we can’t afford legal assistance.”

    The sheer volume of customers being cheated helps them make their claims more weighty. Troutman Pepper Hamilton Sanders attorney Deborah Kovsky-Apap told Bloomberg, “Once you get together, it suddenly becomes possible to get good bankruptcy counsel and have a say at the table.” So far, however, it is unclear whether investors’ attempts to get their money back will be successful. However, Celsius announced via Twitter that it would hold a meeting with the Unsecured Creditors Committee next week to discuss possible options. However, as Cryptoslate reports, the crypto lender has agreed to repay its customers the current value of their crypto assets.

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