Popular Crypto educator and Youtuber, Ben Armstrong aka BitBoy revealed on Twitter about his class action lawsuit against Celsius.
His tweet thread gave an insight into the current Celsius fiasco and steps for common traders to save themselves from the damage.
He said that at this point, he and his lawyers were going through all the disclosures, documents, loan details and more. They were in touch with top class action attorneys to find the best way out.
He revealed that the Celsius Network reportedly hired restructuring lawyers who particularly specialize in preparing firms for bankruptcy. From the last two days, crypto traders had been speculating that the firm was preparing to be acquired.
However, BitBoy added that he spoke to many attorneys who said acquisition is a much lower chance than bankruptcy.
On this, he elaborated, “Bankruptcy is the 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.”
He quoted a Wall Street Journal’s report that read that lawmakers have recently been considering the consequences of a cryptocurrency platform failing.
Last week, a bipartisan duo of senators had proposed a law that makes sure investor’s digital assets would be held separate and protected in case crypto exchanges files for bankruptcy.
Thus, policymakers are vigorously trying to allow “Crypto Banks” including Celsius to be held responsible for digital assets even if they file bankruptcy.
If Celsius files for bankruptcy, BitBoy and his lawyers have discovered some potential workarounds to go ahead with a class action lawsuit. Although he didn’t reveal anything about it in detail.
BitBoy has urged investors, especially those with less than $25k in assets on Celsius, to take the firm to small claims court immediately. This can potentially ensure the claimers win even before bankruptcy is filed.
Additionally, he disclosed that he along with his legal team have not yet reached a point where more Plaintiffs can be added to the suit. This is because they haven’t officially began moving and that could take a few weeks.
He pointed out another possibility could be that investors only get a portion of their money back from Celsius and not a ‘massive relief’. Also, the firm may ask investors to sign on a legal clause saying that ‘on receiving the money, investors lose their ability to litigate against the firm’.
Emphasizing on the significance of self custody, he wrote, “SELF-CUSTODY AS MUCH AS YOU POSSIBLY CAN. We are pulling out of many exchanges. If this can happen at Celsius it theoretically can happen anywhere. Only use exchanges when necessary for trading, on-boarding, and off-boarding”.
Also read: How Celsius crashed Crypto Market?
