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Crypto Reddit rallies after being hit by bankruptcies

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Crypto Reddit rallies after being hit by bankruptcies

A few months ago, Celsius Network LLC’s Reddit group, which has nearly 47,000 members, was filled with discussions about how much everyone was earning by lending their coins through the platform. After the company filed for bankruptcy, members began using the forum, among other things, to fight for the return of their funds.

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(Bloomberg) — A few months ago, Celsius Network LLC’s Reddit group of nearly 47,000 people was filled with discussions about how much everyone was earning by lending their coins through the platform. After the company filed for bankruptcy, members began using the forum, among other things, to fight for the return of their funds.

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Reddit, Telegram, and Twitter helped fuel the meme stocks craze, and now users of the sites are channeling that same energy into campaigning in court in several crypto bankruptcy cases, including Celsius and Voyager Digital Ltd. They tap into the huge social media communities that already exist for both platforms, urging users to write letters to the judge handling Celsius’s case, pool funds for legal representation as well as share news and advices.

The “Celsius Custody Accts” group has amassed over 950 members on Telegram since being promoted on Reddit. Several dozen users paid $1,500 or more to join the committee of the group represented by Togut, Segal & Segal LLP, according to posts on Telegram and one of the group’s organizers, David Little. Others have contributed only a few dollars.

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“It was pretty neat – some of these guys were like, ‘I’m skipping lunch today and putting $15 in GoFundMe instead,'” said Texas-based Little, who declined to say how much he had. on a Celsius account. “It was kind of crazy for a group of strangers who had just gone through this huge process of losing their savings to say, ‘Let’s regroup. Without this crowdfunding approach, we would not have been able to obtain legal representation.

The group’s GoFundMe campaign has raised $3,275 so far, mostly from small donors.

Bringing the group together was fairly straightforward as Celsius had already worked hard to feed their community. CEO Alex Mashinsky had often hosted Twitter spaces and weekly Q&A sessions on YouTube.

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Another ad hoc group announced Thursday, representing Celsius Withhold account holders, is also recruiting on Reddit, posting, “Guys, we need to make sure the court is focusing on Withhold accounts ASAP!” There are currently 63 members in his Telegram group.

“If you band together, all of a sudden it becomes possible to hire a good bankruptcy lawyer and have a voice at the table,” said Deborah Kovsky-Apap, attorney at Troutman Pepper Hamilton Sanders. LLP, representing the group. About a dozen U.S. states didn’t allow custodial accounts to be set up, so customers in those states opened hold accounts, which should also be eligible for a 100% refund of their funds, a she declared.

There is also a “Voyager Victims $5000+” telegram group for clients who have invested more than $5000 in Voyager. He has 175 subscribers so far and is advertising for more members on Reddit. The idea is to exchange updates and “talk about possible legal action or anything we can do to expedite the return of our funds,” one Reddit user said.

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Meanwhile, Thomas Braziel, managing partner at investment firm 507 Capital, which has bought up claims from creditors in previous crypto bankruptcies, said he was already involved in five Telegram groups organized by Celsius creditors alone. . He also said he has participated in more than 10 Twitter spaces related to recent crypto bankruptcies, helping small debt holders understand the proceedings.

“We’d like to buy bigger claims – $1 million and up – but that’s not why I’m out there with the claimants,” Braziel said in an interview, adding that he was getting 10 to 20 direct messages a day on Twitter asking for help in tackling the problem. bankruptcies. “I love cryptos that come to the land of bankruptcy. They are smart people.

Other ad hoc investor groups are formed for different types of Celsius creditors, according to Braziel. Most of them also on Telegram and Reddit.

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