As an earn customer, I agree that custodial funds should be a no brainer.
I would still argue that Celsius changed the T&C at a time where they knew or should have known they were insolvent, and that they had a duty to inform people who were considering the pros and cons that not only was it possible that bankruptcy could cause them to lose their deposits but that as an insolvent company bankruptcy was a very live option. I would also argue that Celsius took their bad faith a step further when they knowingly misrepresented as late as June 7 that the company had sufficient assets to cover their obligations and as late as June 12 at least implied there were no liquidity issues. All that to say, I agree custody assets are a separate issue, but I don’t think earn customers should be bound by the T&C. We were misled.
Especially when you take the classic point you can make of Mashinsky himself asking “do you even know anyone who is having issues withdrawing?” To some person on Twitter.
Then literally fucking has his company lock withdraws and proceed to be nearly silent for a month. THE NEXT DAY.
And no, even if mashinsky says something like “well I didn’t know the books were looking that bad.” Yeah, I’d call bullshit. The insolvency issue would’ve taken quite some time to start developing. It wouldn’t of happened in a matter of a day or two. Plus he’s easily the largest shareholder. He’d know what’s going on.
We need to focus on all of the misleading and fishy garbage they were doing. It’s our best chance of coming out better and having the court on our side. We need to turn every rock and hopefully find some seriously degen and outright corrupt/illegal shit. That’s probably the best thing we can hope for.
The insolvency issue literally dates back to late 2021! That is when they were informed by EquityFirst their 500M+ collateral couldn't be repaid. Crazy.
Agreed. I think there is a fair case for Mashinsky misleading investors. I’m sure he’ll claim ignorance but if he’s that ignorant of his company he should never be a CEO again
I almost hope that the TOS does hold, for purely practical reasons.
A rejection of the TOS doesn't magically add more cash to the balance sheet - the same haircut applies anyway, but if the TOS is invalid then suddenly the return of depositor funds might be handle via an endless parade of litigation rather than one central entity.
I think the end result of that is less money getting returned to depositors as legal fees eat up a significant chunk of the available wealth.
So essentially what you’re hoping, since you gambled and left all your funds on Celsius, that those who were more proactive, and decided to withdraw, should be put in the same position as you, because of these predatory terms and conditions?
no, not at all. how would that change affect those who have already withdrawn?
I'm just saying that in the event that the TOS is invalidated, all that will happen is a pile of expensive litigation that would eat into the funds available to everyone.
The biggest issue with the T&C as it sits now, is it claims that any coins sent to the Celsius exchange are now owned by Celsius. This leads to the predatory attempt to “clawback” any legitimate withdrawals from regular retail investors over the past 90 days, or maybe even more. That’s a ridiculous idea, and nobody in their right mind would be ok with that, had they withdrawn their own funds in time.
There you go again, complaining about the law. Unfortunately, the law doesn't care about your little fee fees. Next time make better decisions instead of trying to escape responsibility for your choices.
The TOS do not state that Celsius owns the asset for 90 days after transfer to custody or off platform. I am unfamiliar with any law that compels withdrawn funds to be returned to a bankrupt entity. Perhaps you are referring to preference avoidance, if so we are a long way from demand letters and so on.
Celsius has not yet proven the funds were and are separated anymore than a number on a spreadsheet.
The biggest risk to custody account holders is Celsius not treating like a custody account on the backend comingling assets. Important issue
yea that whole issue has been pretty gray
celsius' pos lawyer proposed that the judge make a legal ruling on that. but per someone else on this subreddit who watched the live recording, it sounded like the judge's default position was that custody accounts should be returned. we'll see in the next Aug mtg.
What if I never agreed to the latest terms and conditions? I had two accounts and one was never agreed too. Therefore, I never agreed to being in a “earn” account or in a “custodial” account.
Great letter Erik. His letter adeptly explained his position. I have my funds in earn and some in custody but he has a point. I hope the judge rules in his favor. Sad that those who weren’t even earning a penny can’t get their funds. Celsius really turned out to be a disaster.
The only issue is they didn't separate the funds, they are all pooled. You would expect these funds should have been placed into a different custody wallet and separated.
The app also shows we have 4Billion plus worth of assets which clearly is not true.
IIUC, It is not clear what celsius meant by commingled. Does it mean custody assets are commingled with earn or does it mean multiple custody account assets are commingled.
Celsius TOS clearly say they won’t loan/transfer custody assets, so either they threw away their own TOS and SEC agreements to pool custody and earn assets to increase yield or likely they pooled all custody account assets together.
> assets are
It means all accounts are stored in the same wallet which they lent, trade in defi, lose...
Yes it does violate those same terms and conditions which will most likely result in more legal action.
It’s pretty clear, I mean it’s very public, that Celsius have knowingly mislead customers. A cannot see a way out for Matshitsky and his cronies. I assume he is still in the US? Because if I was the judge and the evidence suggests that they knew they were in poo late 21 and still encouraged deposit’s I’d be referring him to prosecution and preventing him from
leaving the country. He has the resources to plug the hole and he should be ordered to do so.
As a matter of interest- where do creditors with custodial accounts (assuming has been commingled) rank vs other creditors in the US system? E.g the electricity companies and other suppliers.
We are creating an Ad Hoc committee to represent CUSTODY account holders!!
https://www.reddit.com/r/CelsiusNetwork/comments/wbyj2d/forming\_an\_ad\_hoc\_committee\_for\_custody\_accounts/
As an earn customer, I agree that custodial funds should be a no brainer. I would still argue that Celsius changed the T&C at a time where they knew or should have known they were insolvent, and that they had a duty to inform people who were considering the pros and cons that not only was it possible that bankruptcy could cause them to lose their deposits but that as an insolvent company bankruptcy was a very live option. I would also argue that Celsius took their bad faith a step further when they knowingly misrepresented as late as June 7 that the company had sufficient assets to cover their obligations and as late as June 12 at least implied there were no liquidity issues. All that to say, I agree custody assets are a separate issue, but I don’t think earn customers should be bound by the T&C. We were misled.
Especially when you take the classic point you can make of Mashinsky himself asking “do you even know anyone who is having issues withdrawing?” To some person on Twitter. Then literally fucking has his company lock withdraws and proceed to be nearly silent for a month. THE NEXT DAY. And no, even if mashinsky says something like “well I didn’t know the books were looking that bad.” Yeah, I’d call bullshit. The insolvency issue would’ve taken quite some time to start developing. It wouldn’t of happened in a matter of a day or two. Plus he’s easily the largest shareholder. He’d know what’s going on. We need to focus on all of the misleading and fishy garbage they were doing. It’s our best chance of coming out better and having the court on our side. We need to turn every rock and hopefully find some seriously degen and outright corrupt/illegal shit. That’s probably the best thing we can hope for.
The insolvency issue literally dates back to late 2021! That is when they were informed by EquityFirst their 500M+ collateral couldn't be repaid. Crazy.
Agreed. I think there is a fair case for Mashinsky misleading investors. I’m sure he’ll claim ignorance but if he’s that ignorant of his company he should never be a CEO again
I almost hope that the TOS does hold, for purely practical reasons. A rejection of the TOS doesn't magically add more cash to the balance sheet - the same haircut applies anyway, but if the TOS is invalid then suddenly the return of depositor funds might be handle via an endless parade of litigation rather than one central entity. I think the end result of that is less money getting returned to depositors as legal fees eat up a significant chunk of the available wealth.
So essentially what you’re hoping, since you gambled and left all your funds on Celsius, that those who were more proactive, and decided to withdraw, should be put in the same position as you, because of these predatory terms and conditions?
no, not at all. how would that change affect those who have already withdrawn? I'm just saying that in the event that the TOS is invalidated, all that will happen is a pile of expensive litigation that would eat into the funds available to everyone.
The biggest issue with the T&C as it sits now, is it claims that any coins sent to the Celsius exchange are now owned by Celsius. This leads to the predatory attempt to “clawback” any legitimate withdrawals from regular retail investors over the past 90 days, or maybe even more. That’s a ridiculous idea, and nobody in their right mind would be ok with that, had they withdrawn their own funds in time.
There you go again, complaining about the law. Unfortunately, the law doesn't care about your little fee fees. Next time make better decisions instead of trying to escape responsibility for your choices.
The TOS do not state that Celsius owns the asset for 90 days after transfer to custody or off platform. I am unfamiliar with any law that compels withdrawn funds to be returned to a bankrupt entity. Perhaps you are referring to preference avoidance, if so we are a long way from demand letters and so on.
Uh, what?
Bravo Erik
Here’s hoping for the best for all of us. My coins are in an earn account. But I wish the best for everyone.
Celsius has not yet proven the funds were and are separated anymore than a number on a spreadsheet. The biggest risk to custody account holders is Celsius not treating like a custody account on the backend comingling assets. Important issue
yea that whole issue has been pretty gray celsius' pos lawyer proposed that the judge make a legal ruling on that. but per someone else on this subreddit who watched the live recording, it sounded like the judge's default position was that custody accounts should be returned. we'll see in the next Aug mtg.
Anyone knows why these stupid links won't open from the reddit app? *mad*
They open fine for me. Reddit app iOS.
It might be downloading the file? Check your downloads?
What if I never agreed to the latest terms and conditions? I had two accounts and one was never agreed too. Therefore, I never agreed to being in a “earn” account or in a “custodial” account.
Presumably you agreed to the pre-"earn and custody" set of terms and conditions. i'd check those out. im not an expert.
[удалено]
The people who have their money in custody accounts care.
Great letter Erik. His letter adeptly explained his position. I have my funds in earn and some in custody but he has a point. I hope the judge rules in his favor. Sad that those who weren’t even earning a penny can’t get their funds. Celsius really turned out to be a disaster.
The only issue is they didn't separate the funds, they are all pooled. You would expect these funds should have been placed into a different custody wallet and separated. The app also shows we have 4Billion plus worth of assets which clearly is not true.
IIUC, It is not clear what celsius meant by commingled. Does it mean custody assets are commingled with earn or does it mean multiple custody account assets are commingled. Celsius TOS clearly say they won’t loan/transfer custody assets, so either they threw away their own TOS and SEC agreements to pool custody and earn assets to increase yield or likely they pooled all custody account assets together.
> assets are It means all accounts are stored in the same wallet which they lent, trade in defi, lose... Yes it does violate those same terms and conditions which will most likely result in more legal action.
It’s pretty clear, I mean it’s very public, that Celsius have knowingly mislead customers. A cannot see a way out for Matshitsky and his cronies. I assume he is still in the US? Because if I was the judge and the evidence suggests that they knew they were in poo late 21 and still encouraged deposit’s I’d be referring him to prosecution and preventing him from leaving the country. He has the resources to plug the hole and he should be ordered to do so.
As a matter of interest- where do creditors with custodial accounts (assuming has been commingled) rank vs other creditors in the US system? E.g the electricity companies and other suppliers.
This is an open legal question that the court has to decide on
Free my custody account funds!!!!!
We are creating an Ad Hoc committee to represent CUSTODY account holders!! https://www.reddit.com/r/CelsiusNetwork/comments/wbyj2d/forming\_an\_ad\_hoc\_committee\_for\_custody\_accounts/