Celsius Clients Asking Bankruptcy Court To Release Crypto

On July 13th, crypto lender Celsius Network filed for bankruptcy. The company recently reached out to its clients and explained that a list of their email addresses had been transferred to a third party.

In addition, clients of the crypto lender have also written to the bankruptcy court and begged to get their assets back.

In fact, one client went as far as saying that he had less than $1,000 in his bank account and was in a dire situation, as he needed money for keeping a roof over his family and for putting food on the table.

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Data breach

Celsius recently sent an email to all of its clients and informed them that an employee of one of the company’s vendors had accessed the list of their email addresses.

The crypto lender said that the addresses had been shared with a third-party, but reiterated that it did not present any such risk to clients whose email addresses had been shared.

Members of the crypto community shared the email with others via different social networks, including Facebook, Twitter, and Reddit.

It should be noted that this is not the first time that Celsius customers have had their data breached.

The company had reported back in April last year that some customers had been contacted by an unidentified source via unofficial channels.

According to sources, the clients of the crypto lender had been targeted with phishing attacks. The latest news about the leak comes not long after the company filed for Chapter 11 bankruptcy in New York.

Bankruptcy proceedings

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Almost a month before it filed for bankruptcy, Celsius had paused withdrawals on its platform on June 12th, which means that clients could not access their funds.

Since the bankruptcy proceedings have begun, the company’s clients have sent letters to the court, demanding that their crypto assets be returned quickly.

The traditional Chapter 11 bankruptcy process takes time, so the customers want the process to move quickly.

One client is a single mother with two daughters, who asserted that her family life had been greatly affected. She said that she cannot eat or sleep and her mental and financial health are suffering because of the bankruptcy and her locked-up assets.

Other clients

Before going bankrupt, there were approximately 1.7 million people using the Celsius Network. Another customer stated that his Wells Fargo account had less than $1,000.

He said that it was an emergency and the bankruptcy had hurt him financially, making it difficult to provide for his family.

The customers writing to bankruptcy court want their funds to be released and dispersed. Other than client letters, Keyfi’s founder, Jason Stone has also taken legal action against the crypto lender.

Customers of Celsius said that they considered the crypto lender unreliable, but had faith in the crypto ecosystem still.

Most of the clients are probably aware that creditor distribution can take a long time in a bankruptcy situation and can be quite cumbersome, as creditors have to file for claims as well.