Cryptocurrency lender Celsius Network was advertising yields of 17 per cent right up to mid-June when it froze withdrawals and then filed for bankruptcy in New York one month later.
Key points:
- Cryptocurrency lender Celsius filed for bankruptcy in New York in mid-July
- Creditors, including Australians, are writing to the court about the devastating financial impact
- The collapse comes after a dramatic downturn in cryptocurrency markets
Marketing itself much like a bank but without the same regulations, it attracted a global customer base — including Australians — many of whom had their assets locked up as cryptocurrency prices collapsed and the company ran aground.
The plight of these retail investors was spotlighted in recent weeks by software engineer and frequent cryptocurrency critic Molly White, who began to tweet moving excerpts from hundreds of letters sent to the New York bankruptcy court and shared in court exhibits.
“The stereotype of people who are putting money into crypto is … young, technologically savvy men,” Ms White told the ABC.
“And that did not seem to be the demographic in the letters.
“There were also a lot of people who were saying, ‘this is my life savings, my pension, I worked 10, 20, 30 years to save this money.'”
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Ms White also shared letters from people who said they were based in Australia, many of whom described their utter desperation and even thoughts of suicide after they were blocked from accessing funds.
One woman said the impact on her family had been severe. She included an email she sent to Celsius management begging to be allowed to withdraw some of her funds. The email included an ultrasound picture of her unborn child.
Others wrote of their emotional turmoil:
“I have lost everything. How can I explain this to my son? I feel ashamed at myself.”
“That was our life savings. It was our chance of having a baby, and funding medical expenses. It was our chance of taking care of our parents as they age.”
If you or anyone you know needs help:
A father of three in Australia wrote he had “his life savings in a Celsius earn account”, and that he’d also convinced his father to deposit cryptocurrency assets into Celsius as a “safe haven”.
As well as putting a personal face to the cryptocurrency crash, many of the letters cite the online presence of Celsius chief executive Alex Mashinsky as a key reason for investing.
They bring up his regular YouTube AMA or “ask me anything” sessions, in which he projected supreme confidence until the end, …….