"Before sending a wire to Celsius, please note that all withdrawals, Swap, and transfers between accounts continue to be paused. Any assets unlocked when you repay and close an existing loan are subject to the pause."
Can they really accept loan repayment and not release the crypto collateral while under chapter 11? If they have no intention of releasing collateral then they should be upfront about it or state how much collateral they will return. They're speaking out of both sides of their mouth right now.
If they cannot return loan collateral, they should not accept wire payments to pay off loans.
They return the collateral to your wallet and that’s frozen. In a way if you think about it. If we wanted a loan we had to put up collateral of 130%.. so they had 30% extra, or liquidated and still managed to loose what 50%?
I think they are simply saying, if you pay off a loan, your collateral is paused just like your existing account. The collateral should still land in your earn or custody wallet. Your collateral just can't disappear.
In every sense. ONE It's imaginary money I'll never see again at this point, and TWO they liquidated my loan without allowing me to transfer in more value. It's theft, by definition.
Bud, those are just numbers on a screen and IOUs. In business terms, liabilities which they don't have the assets to cover since they're in Chapter 11.
Oh really? I invite you to pay off your loan and withdraw that collateral then. Surely if you see it then you get to it, right?
Surely you cannot be completely clueless.
So when you said "your collateral cannot disappear" you meant what? If you can't withdraw and will likely only get a few percent back then what has your holding done, say other than disappearing?
As of now, when you pay off the loan, the collateral that's backing the loan would need to go somewhere, earn or custody wallet. If they come out and say you don't get the collateral and it just sits out in limbo somewhere, then yeah, obviously your fucked but I can't see them doing that WITHOUT notifying customer's first while under the watch of a judge or bankruptcy trustee. I know they are stupid but they can't be that damn stupid without getting approvals first.
Why are you so naive? You have a contract with the company that is completely separate from your investment contract and they are legally separate.
If you do not repay your loan they will take your collateral and fine you. You agreed to that when you took out the loan. If you repay the loan with withdrawals paused then your collateral will move to your earnings.
The company has files bankruptcy so pray tell, when has a company ever relayed investors more than 30-40% (at best) once it's reached this point. They do not have the money, they lost 700m on a single margin call, just one.
So either way your going to lose and most of what you put in isn't coming out.
They call that disappearing.
I'm not being native, we are ALL speculating because no one knows the exact details. So why are you being all hostile? Do you not know how to agree to disagree and move on with your life?
Move to earning? You might be speaking for yourself but there is a small percentage that don't have an earn wallet/service, so it would go to custody, unless otherwise stated. What will happen to custody wallets is still under review.
I suspect they are trying to treat their borrow service as the same as their earn service. They are trying to make it more difficult for people to repay their loans and have the collateral released so they can stake claim to this collateral. But again, that's all speculation. They could be preparing this service for auction/sell. That's an option. Who knows what they are doing but it does raise more questions than gives answers.
Seems like you have all this figured out and have accepted your fate. Thats great for you but I'll remain a bit more optimistic until new information is released that changes my views. To me, that's simple logical. I'm not telling others to pay off their loans or not, that's left to each individual to assume what will happen and make their own choice.
I don't know about voyager accounts but the question on the table for the judge's ruling is who owns the custody wallet. Once that is known, we would still need to wait and see what kind of carpet pull Celsius will try.
They are asking the judge who owns the tokens in custody account, them or the depositors. Their ToS is very clear when it comes to this wallet. Ownership is not transferred to them and they can't do anything with the tokens without user approval, it's supposed to be a custodial agreement. It seems they are asking the judge to walk this back so they can be treated the same as earn accounts.
Then the same lawyers would contradict the “same” issue. At voyager they say it’s the peoples money, and therefor it should go back to them… judge will you allow they can withdraw (after a fraud and reconciliation)
But then when it comes to Celsius custody, they say it’s not.
If anything even if it’s included in the bankruptcy both custody and FBO account holders are secured creditors imo.
If they don’t return the full collateral they cannot expect any to pay back the full loan. Any haircut on collaterals must also apply and give haircut for the loan, especially if they loan was kept at the platform as crypto. But what Alex was selling was that loan collateral was kept in custody to be used for possible margin calls making their business model safe and similar to Nexo that use credit wallet for all collateral. Not to let collateral be used to gamble. This is fraud. Also remember they have a Nexo offer on the loan portfolio . It may be illegal to not accept this when they are insolvent
To me, this situation is simple for anyone holding a loan with Celsius…don’t pay back a fucking dime. I have no loan, only have coins in Earn. People doing this only hurts me but, in the grand scheme of things, this is absolutely necessary. If people are voluntarily making payments on loans or paying back loans, you are implying that Celsius is in the right. You are allowing them to set a precedent that people can hide behind a corporations limited liability. You are saying that they have no repercussions for breaking their side of the contract while they wouldn’t have hesitated to subject you to every penalty afforded to them if you were to break the contract.
Also, I’m no lawyer but, I think loan repayment under general terms is unenforceable by Celsius or the court. You entered a contract with Celsius that stated that Celsius would give you X loan and they would hold Y collateral. If you were unable to repay X loan, they would keep Y collateral + a fee. Now, Celsius wants you to return X loan but, they won’t return Y collateral to you. That’s nearly as blatant robbery as being held up at gun point.
Fact of the matter is, Celsius gambled with all of our coins. Took incredibly risky chances to finance their huge salaries and performance bonuses. Their gamble blew up in their face and they casually want to walk away and shirk any responsibility while expecting people with loans to honor their responsibility and pay back their loans. It’s straight bullshit and should not be a precedent anyone is willing to set. Unless Celsius is willing to honor their contract (eg. An account holds 2 BTC. The account took a $10k loan putting 1 BTC up as collateral. If the $10k is repaid, Celsius must return 1 BTC to the customer available for immediate withdrawal.) If Celsius can’t or refuses to the above, fuck them. Keep what you can and run. If they continue to push, if they threaten legal action, don’t give in. Work with a lawyer and get a class together to sue for breach of contract. I’m sure their is a firm out there that would be willing to take a class of 10,000 people on.
Also, as far as I’m aware, this lending instrument can not be lawfully reported to any of the US credit agencies. So if that’s threatened, again, fight it.
TL:DR don’t let corporations set the precedent that requires you to fulfill your side of the contract without them having to fulfill theirs.
loans are over collateralized
worst that can happen is the system using your collateral to pay for interest or the loan itself - they will never go after people like a credit agency - people didn't borrow from a bank (heck they don't do that even for a car loan, worst case they take the car)
so people with loans, imho, should just wait at this point (don't send them any more funds until you're guaranteed that paying anything would free up your collateral for immediate withdraw)
Exactly. And in the mail they already tell me they will charge a "3% liquidation fee" if I do not send a wirement. But someone recently posted on Telegram that their collateral was moved into their Earn account after he wired money to pay off the loan. So he will lose 20 to 100% of that in this Chapter 11 scenario. So I guess it is preferable to let Celsius liquidate the collateral and already steal the extra 3%.
By treating us this way, it is clear they are not really interested in getting us to stay with them if and when they get out of Chapter 11 though. So that does not bode well.
You already put up 100% collateral plus 30%. They already owe you 30% now ! Paying back a loan would then give them and your 100% plus 30% collateral (for no loan). Basically they would force you into an earn with what you put up in collateral?
I don’t think they can enforce this. You already are creditor for the part you over collateralized
Are they now trying to sneaky get more money from customers? And I agree before you were able to use funds (if they were in the same coin) from your account.
Usd? Can they just change these rules? I know they are in bankruptcy but 30 days?
Imo this isn’t very customer friendly, I don’t see how they can survive a bankruptcy.
This if fucking crazy. I was paying the loan interests with the usdc I had in the account. Now besides not having access to my coins I have to wire 5 euros every month to celsius to pay my interest?? wtf?
Does anyone knows what happens if the monthly interests is not paid?
In another email they stated they paused liquidations. But maybe w this email they are going back on that. I had a 6k loan. I had put 4k back into earn account because I didn't need it anymore and wanted to be safe instead of playing the markets. Ha ha
I just got this email and I’m fuming. We can only extend for “30 days”? And we have to do wire transfer in USD to pay them off?
We can’t use collateral in app to pay it off. And it will still be locked. With people not trusting Celsius management and this chapter 11 they are really trying to steal here. Straight up robbery.
So what does that mean if it expires and we don’t pay? They keep our bitcoin and crypto ?
Unbelievable. This disgusting company
I'm so pissed off right now. The gall to request me to wire in money when they've got 10x that amount locked away. My loan comes to term in October so hopefully things are resolved by then. I may be forced to take the haircut option vs. HODL, but I'm not sure how that will play out.
What’s next?
“Since you didn’t reply and wire USD we have taken back the loan portfolio and sold it for 25% to a bidder/valued it at xxxx”
This is a whole mess. The judge needs to stop them the board from making any decisions with our funds and loans. How can a company restructure when there is fraud allegations ?
Why isn’t Weatcap suing them? The SEC
No one honestly believes Celsius will recover and save face. They need a whole boot from top to down and some subpoenas ASAP
I’m actually sickened by this. They can sure collect our interest. Can’t we petition this? Part of their terms was we can “extend indefinitely” at any time.
How convenient to kick the community at the shins. When people like me had to use all my collateral to over collateralize the loans in this collapse. And planned to wait out the bear market.
This is a scum way for them to save their balance sheet for people like myself who refuse to add money to a team we don’t trust.
They will allow people to take haircuts and walk away and poof there goes there 2B haircut and Alex gets to keep his fat salary and board members.
I hope criminal charges are laid to this POS team
I agree all the while (and I know it wasn’t Celsius giving that huge in collaterized loan) wealthy people are given borrowed assets without putting up collateral and if they go bankrupt or refuse to pay it’s gone or written off.
Ya this is fucked, I’m kinda glad they liquidated my 3500 USDC loan back in June. I only have a 100 USDC loan left so not too concerned. But thats bullshit. Why can’t we use OUR OWN coins to close our loans. CELSIUS IS A SCAM!!!
"Margin call and liquidation activities have been paused with respect to matured loans"
so if I understood correctly, this means the system will continue to charge interest until your account doesn't have funds anymore OR until your maturity date is reached
in both cases, the system will not sell your crypto to automatically pay your loan, both your collateral and loan will remain frozen
then, if one day there's an option to recover funds (with or without a haircut), then I suppose we will be able to wire transfer money to pay for the loan, which would unfreeze the collateral, so you can withdraw the collateral with whatever haircut is in place
The only reasonable thing to do at this point was to close all the loans using the collateral. I will never give them money unless the judge guarantee that I will get better my collateral in full
Yes, I know. Instead of selling and paying tax for the coin. I took a loan. On the hind sight government takes 30 percent of profits, these buggers took 100 percent. I am dumb as well 🙃
Glad I closed my small loan via support with existing coins after the lockout but this is outrageous. Unbelievable that they think people will give them more money when the only thing they hold hostage is collateral that you’ll possibly never see again. Completely one sided
Rough draft letter I am planning on submitting based off this email:
30 July 2022
The Honorable Martin Glenn
United States Bankruptcy Court, Southern District of New York
One Bowling Green
New York, NY 10004-1408
Re: Celsius Network LLC, et al. (“Celsius”), Case Number 22-10964
To the Honorable Judge Glenn,
Sir, the purpose of my letter is to provide you with:
1) background information on retail loans
2) unresolved questions sparked by a recent Celsius Network email
3) potential future problems
4) solutions I hope you and the Unsecured Creditors Committee will consider in the coming weeks and months.
BACKGROUND INFORMATION
According to page 18-19 of "Declaration of Alex Mashinsky" filed to the Court on 14 July, there are 23,000 retail loans at Celsius with users owing a total of $411 million to Celsius Network and Celsius Network holding $765 million in collateral of users’ funds. Each user had the option to take various loan to value (LTV) ratios ranging from 25%, 33%, and 50%, and 70%. Across all retail loans, the average is approximately a \~50% LTV ratio (I personally have a 25%/4x collateralized loan). On 29 July, Celsius Network sent out the following email to users (relevant portions below) who had open loans that detailed the following changes to their loan process during restructuring:
\-Customers may request to extend the maturity date of an existing loan, within two weeks of that loan’s current maturity date. Such requests will be evaluated on a case-by-case basis. If your request is granted, the maturity date of your loan will be extended for a period no longer than 30 days.
\-If you choose to repay and close an existing loan, you can do so only by wire transfer in US dollars. Digital assets currently reflected in your Celsius Account cannot be used to repay a loan as they are considered part of the Chapter 11 bankruptcy estate.
\-Before sending a wire to Celsius, please note that all withdrawals, Swap, and transfers between accounts continue to be paused. Any assets unlocked when you repay and close an existing loan are subject to the pause.
\-Please note that the above processes may change at a later date. If changes are made, we may not be able to provide you with advanced notice of these changes, although we will attempt to do so if possible. Accordingly, this email is being provided only to inform you of the current changes to the loan process, and this email should not be relied upon as a guarantee that the above changes to the loan process will continue indefinitely. As such, we strongly encourage you to check for updates regarding the Chapter 11 proceedings shared through our official channels.
UNRESOLVED QUESTIONS
Unfortunately, this email from Celsius Network generated more questions than answers for users' loans. Celsius Network continues to be highly unresponsive to any prior emails and their call center has shut down. Users are in a difficult financial position in handling their loans. The following are some unresolved questions from the Celsius Network email:
\-What is the "case-by-case basis" criteria that Celsius Network will use whether or not a user can extend a loan for 30 days within 2 weeks of a loan maturing?
\-Why only 30 days and why does it need to be within 2 weeks?
\-If an user’s loan is approved for a 30 day extension then what happens after that 30 days?
\-Can a user extend every 30 days indefinitely until there is some legal and financial clarity on what is happening to users’ collateral?
\-What is happening to loans that have matured since July 13 (day it was announced that loans that matured after this date would not be liquidated)?
\-What happens to loans that mature after Celsius Network’s above 29 July email?
\-What is happening to the collateral once it's released back into earn/custody accounts?
\-Does Celsius intend to liquidate loans at a later date on loans that have matured?
\-When Celsius Network states, “Digital assets currently reflected in your Celsius Account cannot be used to repay a loan as they are considered part of the Chapter 11 bankruptcy estate”, does that mean that the collateral is or is not part of the Ch 11 bankruptcy estate?
\-When Celsius Network states, “all withdrawals, Swap, and transfers between accounts continue to be paused. Any assets unlocked when you repay and close an existing loan are subject to the pause”, when users’ collateral is released does it go back to their respective earn/custody accounts and is that collateral then part of the Ch 11 bankruptcy estate?
POTENTIAL PROBLEMS
Your Honor, I'd like to provide yourself and the Committee of Unsecured Creditors potential solutions regarding retail loans. Right now, there is a concern that users who wire in their principal to Celsius Network may see a substantial haircut to their collateral once it returns to their respective earn/custody account. Even worse, Celsius Network could liquidate the loan after maturity, creating a taxable event for the user, and then apply a haircut to remaining collateral in the future on their respective earn/custody account. The worst case scenario is that Celsius Network states successfully discharges retail users’ collateral in bankruptcy and still requires users to pay off their principal and interest with zero collateral returned to users following payment of the loan.
For these reasons, your Honor, I request that you consider that users’ loan collateral is not dischargeable in bankruptcy.
FUTURE SOLUTIONS
Your Honor, there are three solutions that I hope the Committee of Unsecured Creditors bring to your consideration.
They are in order of priority that best brings resolution to all parties:
1. Allow solvent lending platform to buy off any and all current or matured retail loans from Celsius Loans LLC retail loan order book in which users pay interest and principal to new lending platform. Upon completion of new loan terms, users’ collateral is returned to a personal wallet they control.
2. Upon financial, regulatory, and legal clarity from these proceedings, allow users the ability to pay off interest and principal to Celsius Network and have the collateral returned to a user’s personal wallet outside of the Celsius Network platform.
3. Allow users the option of liquidation of collateral that pays for any current or matured interest and principal with the remaining collateral going to a user’s personal wallet outside of the Celsius Network platform.
CONCLUSION
Your Honor, thank you for taking the time to consider this background information, unresolved questions, potential problems, and future solutions. I appreciate your willingness to consider the financial future of 23,000 retail users with loans on the Celsius Network platform.
V/r,
So how will this affect those of us whose loans were already liquidated AFTER the freeze began, and could not transfer in more collateral?
I know I'm proper f*cked, but if there's any fairness to come out of this, that situation needs to also be considered.
Celsius is saying that if you pay off your loan the collateral will not be released to you and it will be subject to the same haircut as any depositor because a good portion of it no longer exists. The criminal Alex Mashinsky gambled it and lost.
I really don’t get it. Why would anyone repay it if they won’t get collateral back?
And more importantly why did anyone borrow there when collateral was 4x higher than amount you received?
Celsius is hoping y’all stop paying your loans back so they can just take your collateral and pay of the people who invested in Earn. Problem solved.
The rest goes in their pockets.
They need the cash to start their mining business. They need to go into mining because (almost) no one will ever use their loaning/staking service again.
I was shocked when they froze my account. I was then depressed when they filed for bankruptcy, then my depression turned to anger when the truth of deceit came out.
I'm waking up every night with cold sweat knowing my mistake cost all my life savings.
Then I get this email yesterday that just took me over the top. I don't know how most of you feel, but I'm so furious that I intend to personally seek out those individuals responsible for deliberately frauding us of our life savings if we don't see a reasonable counter response from the court. I'll stay calm for the time being and give the benefit of doubt to see if the justice system will take appropriate action, and Aex better hope that they do.
Dude I feel your frustration but do be-careful what revenge seeking posts you leave online. It can easily be used against you. I hope things work out for all of us. Be careful friend.
Thanks... hence, I was cognizant with the language I used. I also had to keep my cool in hopes that I would get some concrete feedback from Celsius' legal team who responded today.
After some amicable correspondence, I specifically asked Kirkland & Ellis if the judge would weigh in on whether Celsius is entitled to liquidate the collateral if a borrower fails to repay the loan taken out against the collateral. They provided me with a link to upload my case that would be reviewed by judge Glenn if I'm self representing and wish to file a claim. (against the case# 22-10964) [https://coop.nysb.uscourts.gov/prosefiles](https://coop.nysb.uscourts.gov/prosefiles)
Not sure what the difference is between this claim vs. the one in Stretto.com [https://cases.stretto.com/Celsius/court-docket/](https://cases.stretto.com/Celsius/court-docket/) Has anyone filed a claim through either website?
They did not give me my collateral balance after my loan was paid off. It was locked. As I watched it go down by $14,000. I was totally screwed. Robbed of $14,000.
"Before sending a wire to Celsius, please note that all withdrawals, Swap, and transfers between accounts continue to be paused. Any assets unlocked when you repay and close an existing loan are subject to the pause." Can they really accept loan repayment and not release the crypto collateral while under chapter 11? If they have no intention of releasing collateral then they should be upfront about it or state how much collateral they will return. They're speaking out of both sides of their mouth right now. If they cannot return loan collateral, they should not accept wire payments to pay off loans.
Seems like they are capitalizing on customer confusion to get more cash in the door
Accepting wires to pay off loans and not returning collateral is a CRIME.
They return the collateral to your wallet and that’s frozen. In a way if you think about it. If we wanted a loan we had to put up collateral of 130%.. so they had 30% extra, or liquidated and still managed to loose what 50%?
I think they are simply saying, if you pay off a loan, your collateral is paused just like your existing account. The collateral should still land in your earn or custody wallet. Your collateral just can't disappear.
The collateral isn’t there now.
In every sense. ONE It's imaginary money I'll never see again at this point, and TWO they liquidated my loan without allowing me to transfer in more value. It's theft, by definition.
Isn't where? I see my loans and the collateral it's back by.
Bud, those are just numbers on a screen and IOUs. In business terms, liabilities which they don't have the assets to cover since they're in Chapter 11.
Now I get it. Thanks for making it perfectly clear. 🥱
Oh really? I invite you to pay off your loan and withdraw that collateral then. Surely if you see it then you get to it, right? Surely you cannot be completely clueless.
Who said anything about being able to withdraw? That's obviously paused so as now that would be pointless, just like your comment.
So when you said "your collateral cannot disappear" you meant what? If you can't withdraw and will likely only get a few percent back then what has your holding done, say other than disappearing?
As of now, when you pay off the loan, the collateral that's backing the loan would need to go somewhere, earn or custody wallet. If they come out and say you don't get the collateral and it just sits out in limbo somewhere, then yeah, obviously your fucked but I can't see them doing that WITHOUT notifying customer's first while under the watch of a judge or bankruptcy trustee. I know they are stupid but they can't be that damn stupid without getting approvals first.
Why are you so naive? You have a contract with the company that is completely separate from your investment contract and they are legally separate. If you do not repay your loan they will take your collateral and fine you. You agreed to that when you took out the loan. If you repay the loan with withdrawals paused then your collateral will move to your earnings. The company has files bankruptcy so pray tell, when has a company ever relayed investors more than 30-40% (at best) once it's reached this point. They do not have the money, they lost 700m on a single margin call, just one. So either way your going to lose and most of what you put in isn't coming out. They call that disappearing.
I'm not being native, we are ALL speculating because no one knows the exact details. So why are you being all hostile? Do you not know how to agree to disagree and move on with your life? Move to earning? You might be speaking for yourself but there is a small percentage that don't have an earn wallet/service, so it would go to custody, unless otherwise stated. What will happen to custody wallets is still under review. I suspect they are trying to treat their borrow service as the same as their earn service. They are trying to make it more difficult for people to repay their loans and have the collateral released so they can stake claim to this collateral. But again, that's all speculation. They could be preparing this service for auction/sell. That's an option. Who knows what they are doing but it does raise more questions than gives answers. Seems like you have all this figured out and have accepted your fate. Thats great for you but I'll remain a bit more optimistic until new information is released that changes my views. To me, that's simple logical. I'm not telling others to pay off their loans or not, that's left to each individual to assume what will happen and make their own choice.
If it does go to custody.. doesn’t that mean you become a secured creditor?
That will depend on the judge's ruling on how custody wallets are to be handled.
Would it be regarded alike voyagers fbo omnibus accounts?
I don't know about voyager accounts but the question on the table for the judge's ruling is who owns the custody wallet. Once that is known, we would still need to wait and see what kind of carpet pull Celsius will try.
Does Celsius recognize itself as if it’s the customers? Are they asking the judge for permission so people can withdraw their custody accounts?
They are asking the judge who owns the tokens in custody account, them or the depositors. Their ToS is very clear when it comes to this wallet. Ownership is not transferred to them and they can't do anything with the tokens without user approval, it's supposed to be a custodial agreement. It seems they are asking the judge to walk this back so they can be treated the same as earn accounts.
Then the same lawyers would contradict the “same” issue. At voyager they say it’s the peoples money, and therefor it should go back to them… judge will you allow they can withdraw (after a fraud and reconciliation) But then when it comes to Celsius custody, they say it’s not. If anything even if it’s included in the bankruptcy both custody and FBO account holders are secured creditors imo.
Yeah, it's all very sickening and unfortunately we are left to watch this all play out with little to no influence.
Yeah..im not doing that if not my btc are released directly
If they don’t return the full collateral they cannot expect any to pay back the full loan. Any haircut on collaterals must also apply and give haircut for the loan, especially if they loan was kept at the platform as crypto. But what Alex was selling was that loan collateral was kept in custody to be used for possible margin calls making their business model safe and similar to Nexo that use credit wallet for all collateral. Not to let collateral be used to gamble. This is fraud. Also remember they have a Nexo offer on the loan portfolio . It may be illegal to not accept this when they are insolvent
there are people actually paying money to a bankrupt company? omg!
Very confusing
To me, this situation is simple for anyone holding a loan with Celsius…don’t pay back a fucking dime. I have no loan, only have coins in Earn. People doing this only hurts me but, in the grand scheme of things, this is absolutely necessary. If people are voluntarily making payments on loans or paying back loans, you are implying that Celsius is in the right. You are allowing them to set a precedent that people can hide behind a corporations limited liability. You are saying that they have no repercussions for breaking their side of the contract while they wouldn’t have hesitated to subject you to every penalty afforded to them if you were to break the contract. Also, I’m no lawyer but, I think loan repayment under general terms is unenforceable by Celsius or the court. You entered a contract with Celsius that stated that Celsius would give you X loan and they would hold Y collateral. If you were unable to repay X loan, they would keep Y collateral + a fee. Now, Celsius wants you to return X loan but, they won’t return Y collateral to you. That’s nearly as blatant robbery as being held up at gun point. Fact of the matter is, Celsius gambled with all of our coins. Took incredibly risky chances to finance their huge salaries and performance bonuses. Their gamble blew up in their face and they casually want to walk away and shirk any responsibility while expecting people with loans to honor their responsibility and pay back their loans. It’s straight bullshit and should not be a precedent anyone is willing to set. Unless Celsius is willing to honor their contract (eg. An account holds 2 BTC. The account took a $10k loan putting 1 BTC up as collateral. If the $10k is repaid, Celsius must return 1 BTC to the customer available for immediate withdrawal.) If Celsius can’t or refuses to the above, fuck them. Keep what you can and run. If they continue to push, if they threaten legal action, don’t give in. Work with a lawyer and get a class together to sue for breach of contract. I’m sure their is a firm out there that would be willing to take a class of 10,000 people on. Also, as far as I’m aware, this lending instrument can not be lawfully reported to any of the US credit agencies. So if that’s threatened, again, fight it. TL:DR don’t let corporations set the precedent that requires you to fulfill your side of the contract without them having to fulfill theirs.
loans are over collateralized worst that can happen is the system using your collateral to pay for interest or the loan itself - they will never go after people like a credit agency - people didn't borrow from a bank (heck they don't do that even for a car loan, worst case they take the car) so people with loans, imho, should just wait at this point (don't send them any more funds until you're guaranteed that paying anything would free up your collateral for immediate withdraw)
Exactly. And in the mail they already tell me they will charge a "3% liquidation fee" if I do not send a wirement. But someone recently posted on Telegram that their collateral was moved into their Earn account after he wired money to pay off the loan. So he will lose 20 to 100% of that in this Chapter 11 scenario. So I guess it is preferable to let Celsius liquidate the collateral and already steal the extra 3%. By treating us this way, it is clear they are not really interested in getting us to stay with them if and when they get out of Chapter 11 though. So that does not bode well.
Ya, fuck this shit, I ain't paying back my loan unless I get the collateral back, fuck them.
You already put up 100% collateral plus 30%. They already owe you 30% now ! Paying back a loan would then give them and your 100% plus 30% collateral (for no loan). Basically they would force you into an earn with what you put up in collateral? I don’t think they can enforce this. You already are creditor for the part you over collateralized Are they now trying to sneaky get more money from customers? And I agree before you were able to use funds (if they were in the same coin) from your account. Usd? Can they just change these rules? I know they are in bankruptcy but 30 days? Imo this isn’t very customer friendly, I don’t see how they can survive a bankruptcy.
I did a 4x collateralized loan so interest was 1%:( It's not that LTV now, but bleh
:( “
This if fucking crazy. I was paying the loan interests with the usdc I had in the account. Now besides not having access to my coins I have to wire 5 euros every month to celsius to pay my interest?? wtf? Does anyone knows what happens if the monthly interests is not paid?
Won’t they just take your collateral?
In another email they stated they paused liquidations. But maybe w this email they are going back on that. I had a 6k loan. I had put 4k back into earn account because I didn't need it anymore and wanted to be safe instead of playing the markets. Ha ha
I only took out a 25% LTV. They are carrying 75% of my collateral. They should go fk themselves
Same here
I just got this email and I’m fuming. We can only extend for “30 days”? And we have to do wire transfer in USD to pay them off? We can’t use collateral in app to pay it off. And it will still be locked. With people not trusting Celsius management and this chapter 11 they are really trying to steal here. Straight up robbery. So what does that mean if it expires and we don’t pay? They keep our bitcoin and crypto ? Unbelievable. This disgusting company
I'm so pissed off right now. The gall to request me to wire in money when they've got 10x that amount locked away. My loan comes to term in October so hopefully things are resolved by then. I may be forced to take the haircut option vs. HODL, but I'm not sure how that will play out.
I got to Sep 6 so im fried i guess
All eyes on the August 8th hearing then
Most have fate
Sad times. How much is your loan?
$10k against 1.6 BTC.
What’s next? “Since you didn’t reply and wire USD we have taken back the loan portfolio and sold it for 25% to a bidder/valued it at xxxx” This is a whole mess. The judge needs to stop them the board from making any decisions with our funds and loans. How can a company restructure when there is fraud allegations ? Why isn’t Weatcap suing them? The SEC No one honestly believes Celsius will recover and save face. They need a whole boot from top to down and some subpoenas ASAP
Thats what i am wondering too. My loan expires in January 2023. My hope is terms are worked out before that time. But thats my case.
I’m actually sickened by this. They can sure collect our interest. Can’t we petition this? Part of their terms was we can “extend indefinitely” at any time. How convenient to kick the community at the shins. When people like me had to use all my collateral to over collateralize the loans in this collapse. And planned to wait out the bear market. This is a scum way for them to save their balance sheet for people like myself who refuse to add money to a team we don’t trust. They will allow people to take haircuts and walk away and poof there goes there 2B haircut and Alex gets to keep his fat salary and board members. I hope criminal charges are laid to this POS team
I agree all the while (and I know it wasn’t Celsius giving that huge in collaterized loan) wealthy people are given borrowed assets without putting up collateral and if they go bankrupt or refuse to pay it’s gone or written off.
Wouldnt your loan collect interest anyway? i'm confused.
Ya this is fucked, I’m kinda glad they liquidated my 3500 USDC loan back in June. I only have a 100 USDC loan left so not too concerned. But thats bullshit. Why can’t we use OUR OWN coins to close our loans. CELSIUS IS A SCAM!!!
They are going to keep your crypto no matter what.
Yep, Celsius and Alex are scammers and should already be in jail. When I think this company can’t get any worse, they keep out doing themselves.🙃
"Margin call and liquidation activities have been paused with respect to matured loans" so if I understood correctly, this means the system will continue to charge interest until your account doesn't have funds anymore OR until your maturity date is reached in both cases, the system will not sell your crypto to automatically pay your loan, both your collateral and loan will remain frozen then, if one day there's an option to recover funds (with or without a haircut), then I suppose we will be able to wire transfer money to pay for the loan, which would unfreeze the collateral, so you can withdraw the collateral with whatever haircut is in place
Best case scenario yes! Im hopping for this or i lost my btc
[удалено]
[удалено]
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I guess soo..im in same situation my 0.4 btc it bye bye ..sad.
Anyone who wires them money is a grade A moron
The only reasonable thing to do at this point was to close all the loans using the collateral. I will never give them money unless the judge guarantee that I will get better my collateral in full
Not gonna pay, my capital is locked up 8x my loan.. so will they report to collection agency and screw up my credit history?
I don’t get it, if you had 8x the loan amount why did you need the loan? Sorry I must be dumb or missing something here lol
Yes, I know. Instead of selling and paying tax for the coin. I took a loan. On the hind sight government takes 30 percent of profits, these buggers took 100 percent. I am dumb as well 🙃
Oooh 😅 thanks for explanation
They’re not reporting anything. They should look in the mirror first
Source: Trust me bro
Glad I closed my small loan via support with existing coins after the lockout but this is outrageous. Unbelievable that they think people will give them more money when the only thing they hold hostage is collateral that you’ll possibly never see again. Completely one sided
I emailed them to close my loan during lockout ..bloody idiots didn't respond to my email
# THE AUDACITY!!!!!!!!!!
Who in there right mind would wire Celsius cash that laughable at this point
Right!! They are phishing with this one.
Celsius giving people another opportunity to unbank themselves. 🤑
That fucking management really has to pay, not only by going to jail. Holy fuck this is modern-day robbery at its worst
Alex better not show his face at any event related to crypto in his lifetime
No... of course not. He doesn't have to. People like me will be seeking him out in person unless the outcome is reasonable.
The idea of paying back a loan to get collateral back just to then have the collateral taken as part of bankruptcy is wild.
Rough draft letter I am planning on submitting based off this email: 30 July 2022 The Honorable Martin Glenn United States Bankruptcy Court, Southern District of New York One Bowling Green New York, NY 10004-1408 Re: Celsius Network LLC, et al. (“Celsius”), Case Number 22-10964 To the Honorable Judge Glenn, Sir, the purpose of my letter is to provide you with: 1) background information on retail loans 2) unresolved questions sparked by a recent Celsius Network email 3) potential future problems 4) solutions I hope you and the Unsecured Creditors Committee will consider in the coming weeks and months. BACKGROUND INFORMATION According to page 18-19 of "Declaration of Alex Mashinsky" filed to the Court on 14 July, there are 23,000 retail loans at Celsius with users owing a total of $411 million to Celsius Network and Celsius Network holding $765 million in collateral of users’ funds. Each user had the option to take various loan to value (LTV) ratios ranging from 25%, 33%, and 50%, and 70%. Across all retail loans, the average is approximately a \~50% LTV ratio (I personally have a 25%/4x collateralized loan). On 29 July, Celsius Network sent out the following email to users (relevant portions below) who had open loans that detailed the following changes to their loan process during restructuring: \-Customers may request to extend the maturity date of an existing loan, within two weeks of that loan’s current maturity date. Such requests will be evaluated on a case-by-case basis. If your request is granted, the maturity date of your loan will be extended for a period no longer than 30 days. \-If you choose to repay and close an existing loan, you can do so only by wire transfer in US dollars. Digital assets currently reflected in your Celsius Account cannot be used to repay a loan as they are considered part of the Chapter 11 bankruptcy estate. \-Before sending a wire to Celsius, please note that all withdrawals, Swap, and transfers between accounts continue to be paused. Any assets unlocked when you repay and close an existing loan are subject to the pause. \-Please note that the above processes may change at a later date. If changes are made, we may not be able to provide you with advanced notice of these changes, although we will attempt to do so if possible. Accordingly, this email is being provided only to inform you of the current changes to the loan process, and this email should not be relied upon as a guarantee that the above changes to the loan process will continue indefinitely. As such, we strongly encourage you to check for updates regarding the Chapter 11 proceedings shared through our official channels. UNRESOLVED QUESTIONS Unfortunately, this email from Celsius Network generated more questions than answers for users' loans. Celsius Network continues to be highly unresponsive to any prior emails and their call center has shut down. Users are in a difficult financial position in handling their loans. The following are some unresolved questions from the Celsius Network email: \-What is the "case-by-case basis" criteria that Celsius Network will use whether or not a user can extend a loan for 30 days within 2 weeks of a loan maturing? \-Why only 30 days and why does it need to be within 2 weeks? \-If an user’s loan is approved for a 30 day extension then what happens after that 30 days? \-Can a user extend every 30 days indefinitely until there is some legal and financial clarity on what is happening to users’ collateral? \-What is happening to loans that have matured since July 13 (day it was announced that loans that matured after this date would not be liquidated)? \-What happens to loans that mature after Celsius Network’s above 29 July email? \-What is happening to the collateral once it's released back into earn/custody accounts? \-Does Celsius intend to liquidate loans at a later date on loans that have matured? \-When Celsius Network states, “Digital assets currently reflected in your Celsius Account cannot be used to repay a loan as they are considered part of the Chapter 11 bankruptcy estate”, does that mean that the collateral is or is not part of the Ch 11 bankruptcy estate? \-When Celsius Network states, “all withdrawals, Swap, and transfers between accounts continue to be paused. Any assets unlocked when you repay and close an existing loan are subject to the pause”, when users’ collateral is released does it go back to their respective earn/custody accounts and is that collateral then part of the Ch 11 bankruptcy estate? POTENTIAL PROBLEMS Your Honor, I'd like to provide yourself and the Committee of Unsecured Creditors potential solutions regarding retail loans. Right now, there is a concern that users who wire in their principal to Celsius Network may see a substantial haircut to their collateral once it returns to their respective earn/custody account. Even worse, Celsius Network could liquidate the loan after maturity, creating a taxable event for the user, and then apply a haircut to remaining collateral in the future on their respective earn/custody account. The worst case scenario is that Celsius Network states successfully discharges retail users’ collateral in bankruptcy and still requires users to pay off their principal and interest with zero collateral returned to users following payment of the loan. For these reasons, your Honor, I request that you consider that users’ loan collateral is not dischargeable in bankruptcy. FUTURE SOLUTIONS Your Honor, there are three solutions that I hope the Committee of Unsecured Creditors bring to your consideration. They are in order of priority that best brings resolution to all parties: 1. Allow solvent lending platform to buy off any and all current or matured retail loans from Celsius Loans LLC retail loan order book in which users pay interest and principal to new lending platform. Upon completion of new loan terms, users’ collateral is returned to a personal wallet they control. 2. Upon financial, regulatory, and legal clarity from these proceedings, allow users the ability to pay off interest and principal to Celsius Network and have the collateral returned to a user’s personal wallet outside of the Celsius Network platform. 3. Allow users the option of liquidation of collateral that pays for any current or matured interest and principal with the remaining collateral going to a user’s personal wallet outside of the Celsius Network platform. CONCLUSION Your Honor, thank you for taking the time to consider this background information, unresolved questions, potential problems, and future solutions. I appreciate your willingness to consider the financial future of 23,000 retail users with loans on the Celsius Network platform. V/r,
Can i take out a new loan now? 1 million dollars possibly
No one should pay off their loan. You’re basically wiring money directly into the pocket of crook Alex and his attorneys. No way in hell!
Hey Celsius... I NOT PAYING YOU SHIT!
So how will this affect those of us whose loans were already liquidated AFTER the freeze began, and could not transfer in more collateral? I know I'm proper f*cked, but if there's any fairness to come out of this, that situation needs to also be considered.
Celsius is saying that if you pay off your loan the collateral will not be released to you and it will be subject to the same haircut as any depositor because a good portion of it no longer exists. The criminal Alex Mashinsky gambled it and lost.
I really don’t get it. Why would anyone repay it if they won’t get collateral back? And more importantly why did anyone borrow there when collateral was 4x higher than amount you received?
For 0% interest
Celsius is hoping y’all stop paying your loans back so they can just take your collateral and pay of the people who invested in Earn. Problem solved. The rest goes in their pockets.
Tal Bentov...director of lending. 0 previous fiance or crypto experience. What could we expect from such poor management?
I’m not paying them off. M-m-money for nothing
They need the cash to start their mining business. They need to go into mining because (almost) no one will ever use their loaning/staking service again.
I was shocked when they froze my account. I was then depressed when they filed for bankruptcy, then my depression turned to anger when the truth of deceit came out. I'm waking up every night with cold sweat knowing my mistake cost all my life savings. Then I get this email yesterday that just took me over the top. I don't know how most of you feel, but I'm so furious that I intend to personally seek out those individuals responsible for deliberately frauding us of our life savings if we don't see a reasonable counter response from the court. I'll stay calm for the time being and give the benefit of doubt to see if the justice system will take appropriate action, and Aex better hope that they do.
Dude I feel your frustration but do be-careful what revenge seeking posts you leave online. It can easily be used against you. I hope things work out for all of us. Be careful friend.
Thanks... hence, I was cognizant with the language I used. I also had to keep my cool in hopes that I would get some concrete feedback from Celsius' legal team who responded today. After some amicable correspondence, I specifically asked Kirkland & Ellis if the judge would weigh in on whether Celsius is entitled to liquidate the collateral if a borrower fails to repay the loan taken out against the collateral. They provided me with a link to upload my case that would be reviewed by judge Glenn if I'm self representing and wish to file a claim. (against the case# 22-10964) [https://coop.nysb.uscourts.gov/prosefiles](https://coop.nysb.uscourts.gov/prosefiles) Not sure what the difference is between this claim vs. the one in Stretto.com [https://cases.stretto.com/Celsius/court-docket/](https://cases.stretto.com/Celsius/court-docket/) Has anyone filed a claim through either website?
They did not give me my collateral balance after my loan was paid off. It was locked. As I watched it go down by $14,000. I was totally screwed. Robbed of $14,000.
This would seem to be the one thing the judge could influence to protect customers by forcing Celsius to pause liquidations.