After the crypto lender Celsius filed for bankruptcy protection on July 13, the company recently contacted customers and explained that an employee from one of the firm’s vendors accessed a list of Celsius client emails, and the email addresses were “transferred to a third party.” Furthermore, Celsius customers have written to the court begging to get their crypto assets back as one client said he had less than $1K in the bank and his situation was a dire emergency in order to “keep a roof over my family and food on their table.”
Celsius Clients Told of Email Breach, Retail Investors Say They’ve Been ‘Seriously Hit’ by Crypto Lender Fallout
It seems that Celsius was contact customers by e-mail and explaining that a list of e-mails of customers would have been transferred to a third party. The email says this was after an employee of one of Celsius’ suppliers accessed the list. The story has become a topical conversation on social media, even though crypto lender Celsius says “we do not consider the incident to be high risk for our customers whose email addresses may have been affected”. Of course, many members of the crypto community shared the news from far across TwitterFacebook and Reddit.
This is not the first time data stemming from Celsius customers has been breached. Celsius reported on an “unidentified source has contacted some Celsius customers via unofficial channels” in April 2021. Sources at the time said Celsius customers were being solicited with phishing scams. The latest news about the Celsius email leak follows the company’s bankruptcy registration when it “filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York” on July 13.
The bankruptcy filing followed the company’s withdrawal and trading pause on June 12 at 10:10 p.m. (ET). At that time, Celsius announced that it had suspended “all withdrawals, exchanges and transfers between accounts”. As for the bankruptcy process, Celsius clients have been writing letters to the court asking to get their crypto assets back faster than the traditional process for Chapter 11 bankruptcy creditors. A client, a single mother of two daughters, said his family’s life had been greatly affected.
“I and my family are severely impacted both in financial and mental health by the bankruptcy and locked up cryptos. I always check the app if my cryptos are still there. I can’t focus on my job or sleep,” the woman wrote in her letter to the bankruptcy court. Before Celsius went bankrupt, Celsius claimed that it had roughly 1.7 million customers. Another Celsius customer said that he had less than $1K in his Wells Fargo bank account, and the crypto lender’s bankruptcy hurt him a great deal financially. The customer stressed:
It’s an EMERGENCY, just to keep a roof over my family and food on their table.
Celsius client says he still has “full faith in crypto”
The client and many other clients who have written letters to the bankruptcy court want authorities to release the funds and distribute the crypto to retail clients. Besides bankruptcy and client letters, the crypto lender is also facing legal action from a former associate Jason Stone, the founder of Keyfi.
While the customer letters pleaded with the court to release funds, some Celsius investors noted that while the crypto lender itself was unreliable, they still trusted the crypto ecosystem. “I still have full faith in crypto, but do not have faith in the management of Celsius with the current team,” another Celsius client wrote to the court.
Most of them are probably aware that waiting for the creditors’ allocation in a bankruptcy case can be long and tedious, and often fruitless. In addition, creditors must also prove themselves with a document called a “proof of claim”. Celsius to provided customers with information on where they can file a creditor claim.
