Ben Armstrong, the founder of BitBoy Crypto, said that Celsius won’t let him take money out of the platform until he sends more money to it.
Only two weeks after participating in an AMA with Celsius creator Alex Mashinsky, crypto Youtuber Ben Armstrong has declared his intention to pursue a class action lawsuit against the loan platform and its CEO.
Armstrong issued legal threats on Twitter on June 15, and has since offered further information in several posts. His issue is that he is unable to pay down loans with existing cash on the site and must instead deposit fresh dollars to do so:
“[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.”
“Imagine an insolvent corporation from which you cannot withdraw your funds ASKING YOU TO SEND THEM MORE MONEY,” he continued.
Armstrong claimed that he is now putting together all “disclosures, documents, loan details, etc.” while speaking with attorneys to determine the best route to proceed with the class action. Co-plaintiffs have yet to be added because Armstrong has not yet “formally begun moving.”
With about 1.45 million subscribers, BitBoy Crypto is the second most subscribed cryptocurrency YouTube account and generally gives analysis on market news/events. The channel is only second to Coin Bureau, which has 2.07 million members, but BitBoy Crypto has its detractors, some of whom claim he has been paid to promote questionable crypto assets in the past.
Armstrong’s feelings about Celsius have shifted dramatically since appearing on an AMA session with Mashinsky on Celsius’ YouTube channel just two weeks ago.
“Today, I’m the victim.” “I’m kicking myself for allowing this to get so terrible and so far,” he said.
Celsius is either bankrupt or having serious liquidity issues as a result of the crypto market crash. On June 13, the firm halted withdrawals and purportedly transferred roughly $320 million in assets to pay off loans and avoid liquidation on decentralized finance (DeFi) platforms like as AAVE.
However, if Celsius declares bankruptcy, it will trigger a mechanism known as a “automatic stay,” which will prevent creditors from undertaking collection activity against the company.
Celsius has apparently hired restructuring lawyers from Akin Gump Strauss Hauer & Feld to help it find financial solutions, but Armstrong believes that these types of lawyers “specialize in MOSTLY preparing firms for bankruptcy.”
“Even if Celsius declares bankruptcy, we have identified some potential loopholes to continue with a class action lawsuit” (not effected by bankruptcy). “Unfortunately, I have to hold that one close to the vest for the time being,” he explained.
In terms of recouping cash from Celsius, it appears that individuals with less than $25,000 on the site may be able to obtain their assets in the near future. On June 15, Joshua Browder, the founder of robot lawyer DoNotPay, tweeted a step-by-step method for users to recover funds:
“As of right now, these exchanges have not yet filed for bankruptcy protection. Therefore, they are subject to small claims court judgements. Smalllaims court cases typically take 1-2 months. As long as this drags on longer than that, this strategy will work.”
