BitBoy founder threatens class action lawsuit against Celsius

only two weeks later appears in a ask me anything (AMA) with Celsius founder Alex Mashinsky, crypto-youtuber Ben Armstrong has announced plans to file a class action lawsuit against the lending platform and its CEO.

Armstrong made legal threats via Twitter on June 15, and has since provided more details in several threads. His issue is aimed at not repaying loans with existing funds on the platform, and instead of depositing new funds to repay the loans:

“[Our account rep] told us we have enough money in our account to pay off a loan. But we can not use money in our account. WE HAVE TO SEND CELSIUS MORE MONEY TO PAY IT OFF. ”

“Imagine an insolvent company from which you can not withdraw your money, AND ASK YOU TO SEND MORE MONEY TO THEM,” he added.

Armstrong said he is currently working through the process of gathering all “disclosures, documents, loan details, etc.” while talking to attorneys to investigate the best ways to do the class action. Co-plaintiffs have yet to be added as Armstrong has not yet “officially started moving”.

BitBoy Crypto is the second most subscribed crypto YouTube account with around 1.45 million subscribers and mainly comments on market news / events. The channel is just behind Coin Bureau and its 2.07 subscribers, although BitBoy million Crypto also has many opponents, some of whom welcome that he has been paid in the past to promote dubious crypto-assets.

Armstrong’s sentiments towards Celsius swung wildly from just two weeks ago, when he exhibited on the Ask Me Anything (AMA) session with Mashinsky on Celsius’s YouTube channel.

“And today I am the victim. “I kick myself because I wondered how I made it so bad and so far,” he said.

Celsius is either struggling with insolvency or experiencing serious liquidity problems due to the crypto-market decline. The firm suspended withdrawals on June 13, and is also reportedly about $ 320 million worth of assets shifted to repay loans and avoid liquidation on decentralized financing (DeFi) platforms such as AAVE.

However, one issue of a possible lawsuit is if Celsius applies for bankrupt this will result in a provision called “automatic residency”, which will prevent creditors from engaging in collection activities against the firm.

Celsius apparently restructuring lawyers on board of Akin Gump Strauss Hauer & Feld to find possible solutions to his financial problems, but Armstrong claims that these types of attorneys “mostly specialize in preparing companies for bankruptcy.”

“Even if Celsius does go bankrupt, we have discovered some possible solutions to still file a class action lawsuit (not caused by bankruptcy). “Unfortunately I have to keep that one close to the vest for the time being,” he said.

In terms of recovering funds from Celsius, this seems to be at least a possible option for users with less than $ 25,000 on the platform to acquire their assets in the immediate future. Joshua Browder, founder of robot lawyer DoNotPay, tweeted a step-by-step strategy on June 15 on how users can potentially recover funds:

“As of now, these exchanges have not applied for bankruptcy protection. Therefore, they are subject to small claims court rulings. Court cases for small claims usually last 1-2 months. As long as it lasts longer than that, this strategy will work. ”

Submitting a small claims lawsuit is the first step in sending a claim letter.

The application letter should say 1) how much you owe 2) why you think you owe the money.

For Celsius specifically, you should mail it (request receipt) to:

– Joshua Browder (@ jbrowder1) 15 June 2022