Some customers of crypto lender Celsius Network, which filed for bankruptcy earlier this month, have written to the Bankruptcy Court for the Southern District of New York, with a hope of getting their funds back.
As digital assets crashed, Celsius, which said it had more than 1.7 million users as of June, halted withdrawals since June 12. The crypto lender allowed consumers to buy, borrow or deposit their cryptocurrencies and earn interest of up to 18.6% annually. Most “high yield” savings accounts in U.S. dollars offer annual percentage yields closer to 1% or less, according to Bankrate.
Celsius has a roughly $1.2 billion hole in its balance sheets, according to bankruptcy filings. It had $5.5 billion total liabilities as of July 13, including more than $4.7 billion owed to Celsius’s users. The company had $4.3 billion of total assets, according to a filing.
In bankruptcy filings, Celsius noted that its customers transferred ownership of their crypto to the company, a move experts say could potentially hint at its plans to request its users be treated as unsecured creditors in the bankruptcy process.
Read: Is your crypto on Celsius or Voyager? Factors that determine whether you may get your money back
In letters to the bankruptcy court, many Celsius customers said they felt lied to by the company and by Alex Mashinsky, its chief executive. “Every Friday AMA (Ask me anything) on YouTube, Celsius continued to tell people they were better than a bank. Safer, with better returns. As well as tell us they had billions in liquid cash,” wrote Brian Kasper, one of the platform’s customers.
“I watched every single AMA each Friday since sign-up, and week in and week out Alex would talk about how Celsius is safer than banks because they supposedly don’t rehypothecate and use fractional reserve lending like the banks do,” Stephen Richardson wrote in a letter to the court. He described himself as a Celsius customer since 2019, with more than six figures worth of crypto on the platform.
“I am embarrassed,…