Celsius Network, a crypto lending firm, paused all withdrawals, swaps and transfers between the accounts indefinitely on June 12 citing extreme market conditions amid Terra ecosystem collapse. However, the lending firm paused the users accounts without any prior notice and with no update on when they would resume. Users have vowed to file a lawsuit if it does not comply with their demands. Following an AMA with Celsius creator Alex Mashinsky, crypto Youtuber, Ben Armstrong, popularly known as Bitboy crypto, declared his intention to pursue a class-action lawsuit against the lending firm and its CEO.
On June 15, crypto YouTuber and Bitboy founder, Ben Armstrong tweeted:
Today we will begin the process of bringing a Class Action Lawsuit against @CelsiusNetwork and Alex @Mashinsky.
More details in the coming days.
— Ben Armstrong (@Bitboy_Crypto) June 15, 2022
Armstrong shared the details regarding the class-action lawsuit against Celsius and its CEO on the twitter thread on June 16. He stated that as his account is frozen; he is unable to pay down loans using existing cash on the platform rather than having to deposit fresh money to do so.
Armstrong went on to say that he is now gathering all “disclosures, records, loan data, and so on,” as well as consulting with attorneys to figure out the best course of action. Armstrong hasn’t “formally begun moving” yet, thus there aren’t any co-plaintiffs yet.
Quick thread on @CelsiusNetwork class action lawsuit developments for everyone. Obviously there are things I can't say, but I'll generally tell you where we stand.
Spoke with lawyers who assisted me in past and in on-going lawsuit (wouldn't you like to know lol)
— Ben Armstrong (@Bitboy_Crypto) June 16, 2022
Celsius is claimed to have enlisted the expertise of Akin Gump Strauss Hauer & Feld restructuring lawyers to help it resolve its financial issues.
Nonetheless, Armstrong argues that these attorneys “primarily prepare firms for bankruptcy.” He explained by tweeting:
Bankruptcy is nuclear option for Celsius because that would stop any class action against the platform immediately as anyone holding crypto there would be considered an "unsecured creditor" meaning you get moved to the bottom of the line where no money is left.
— Ben Armstrong (@Bitboy_Crypto) June 16, 2022