For crypto investors, if you had money in Celsius this is for you. I’ll try to keep it short and on point.
Celsius has filed for bankruptcy and is not planning to re-open withdrawals. Your chance at getting something back will be after any potential litigation. The fact that Celsius moved to file for bankruptcy probably already means that any potential buyout deals were ruled out.
What Does this mean ?
What this means is that you will have to wait until the bankruptcy process plays out before you can expect to receive any of your deposited funds back. This could take months, or even years. In the meantime, you should keep track of the bankruptcy proceedings and make sure to file a proof of claim form if and when it becomes available.
Why We Think Retail Crypto Customers Will Get Screwed By Celsius.
Along with our general pessimism of any large company in general, we lifted this from Celsius’ TOS(13. Consent to Celsius’ Use of Digital Assets):
“In the event that Celsius becomes bankrupt, enters liquidation or is otherwise unable to repay its obligations, any Eligible Digital Assets used in the Earn Service or as collateral under the Borrow Service may not be recoverable, and you may not have any legal remedies or rights in connection with Celsius’ obligations to you other than your rights as a creditor of Celsius under any applicable laws.”
How Will The Bankruptcy Proceedings Play Out ?
The bankruptcy proceeding will take years. During that time, Celsius employees including the highly paid higher-ups will continue to draw a salary, and Celsius will continue to pay its lawyers. The remaining money will be used to pay secured creditors at 70 to 90 cents on the dollar. Anything leftover will be pennies on the dollar for regular investors and there will be a mountain of paperwork and another year of waiting to get even that. Basically, if you’re an investor in Celsius, you’re not going to see any of your money for a very long time, if ever.
Any Silver Lining ?
Aside from some very important(and expensive) lessons, there is little positive news for the average retail crypto investor. These are the takeaways from this:
- ALWAYS self custody the majority of your portfolio
- Don’t fall for high yield promises – if anything use them as a warning
- Be extra vigilant in this space, even with a seemingly trustworthy actor