By
Temitope Olatunji
February 2nd, 2024
The BitBoy camp may not be able to file a class-action lawsuit just yet as Celsius has not yet filed for bankruptcy.
Just days after American crypto lender, Celsius announced it was pausing all withdrawals on its platform in a bid to reposition itself amid the “extreme economic conditions” the digital currency ecosystem has been plunged into, the company is on the brink of being dragged to court in a class-action lawsuit being spearheaded by BitBoy Crypto.
“Today we will begin the process of bringing a Class Action Lawsuit against @Celsius Network and Alex @Mashinsky,” said BitBoy Crypto, the popular name for which cryptocurrency influencer and educator, Ben Armstrong is known.
Armstrong is drawing on his more than 1.4 million YouTube subscribers, he hopes to gather as many Plaintiffs for the lawsuit as possible.
Armstrong said he is in talks with lawyers in order to find the best approach to the lawsuit, as he is aggrieved he is unable to utilize funds on the Celsius platform to service some of its loan portfolios that were due. With the pause of withdrawals by the crypto lender, BitBoy said he had to send additional funds in order to pay down the debt.
“[Our account rep] told us we had enough money in our account to pay off a loan. But we can’t use money in our account. We HAVE TO SEND CELSIUS MORE MONEY TO PAY IT OFF,” BitBoy said in a tweet, adding, “Imagine an insolvent company that you can’t withdraw your money from ASKING YOU TO SEND THEM MORE MONEY.
BitBoy Crypto Proves Celsius Is Insolvent
Ben Armstrong argues that the only reason why the company might have refused to permit its users to pay their loans off with existing funds is that the New Jersey-based lender is largely insolvent.
“Literally defies logic. So you may be asking yourself the question, “why would they not let you pay off the loan with money/crypto/stables that are already in your account?,” he asked, “IT’S BECAUSE THEY ARE TOTALLY INSOLVENT. The money that shows in our account isn’t actually there. That’s the only reason we can’t use it. It’s not there. And these idiots have the audacity to think that we are going to send more?”
The BitBoy camp may not be able to file a class-action lawsuit just yet as Celsius has not yet filed for bankruptcy. Should the firm eventually file for bankruptcy, carrying out a collective legal action may not be a viable option. According to BitBoy, he and his team have found a way to bypass the limitation with which bankruptcy will prevent them from moving ahead with the class-action lawsuit, but he said he has to keep that detail to himself for now.
The move to serve Celsius a class-action lawsuit is the case of friends turned foe, considering Ben Armstrong was featured in the company’s Ask Me Anything series about 2 weeks ago.
Meanwhile, Nexo, a competing crypto lender has an extended offer to buy off Celsius’ collateralized loans, an offer that will expire in a few days, but if accepted, may ease the burden off the embattled company’s clients.