Cryptocurrency lender Celsius Network LLC attracted scores of people over the last five years who wanted to make money betting on bitcoin. After a crypto crash pushed the company into bankruptcy this summer, some of these amateur investors found unity around a new goal: getting that money back, the Wall Street Journal reported. Thousands of Celsius customers are gathering on social media apps such as Telegram and Reddit to parse legal filings together, pooling funds to pay for lawyers and making YouTube summaries of developments at court hearings. Some are reading up on U.S. bankruptcy law, providing translations for non-English speakers and trying to engineer their own white-knight rescue deals. They face an uphill battle in chapter 11 bankruptcy negotiations, where small customers are vulnerable to losses and rarely have a seat at a table typically dominated by lawyers and advisers. The company has at least two more months to formulate a reorganization plan that will determine what happens to customer accounts and how assets will be distributed. Some customers are asking the U.S. Bankruptcy Court judge overseeing the case in the Southern District of New York to let them salvage remaining assets for themselves. Celsius, founded in 2017 by Alex Mashinsky, became a big cryptocurrency lender by pledging to upend traditional banking and allow regular people a way to tap into the potential of digital currencies. Celsius took deposits and made loans, while paying far more on those deposits than a federally regulated bank would. Mr. Mashinsky also became a regular fixture at crypto conferences, donning a T-shirt that read, “Banks are not your friends.” But lofty yields to depositors and large loans backed by little collateral left Celsius without much of a cushion when the cryptocurrency market imploded earlier this year. Celsius paused all withdrawals in June and filed for bankruptcy in July, saying that it owed customers nearly $4.7 billion in crypto. The deficit between the firm’s liabilities and assets, which includes crypto as well as other holdings, was roughly $1.2 billion. The company said as of its filing it had 1.7 million customers, including 300,000 with accounts worth over $100.
