May 1, 2023 - Economy

Celsius customers file class claim seeking $5.2 billion plus "damages"

A photo illustration of the Celsius logo surrounded by physical coins.

Photo: Jakub Porzycki/NurPhoto via Getty Images

Celsius is facing new allegations brought by a group of its disgruntled customers who want all of their money back and then some.

Driving the news: A group of unsecured creditors filed a class claim against the bankrupt platform, seeking no less than the full amount they are owed in trapped funds, some $5.2 billion, as well as "damages" in an amount to be determined later at trial, a court filing submitted over the weekend shows.

  • Flashback: The judge presiding over Celsius' bankruptcy proceeding approved the motion to allow submission of the claim last month, in spite of the U.S. Trustee's objection.

The big picture: To date, Celsius' customers have argued for what they are owed based on the contract struck between them and Celsius Network LLC.

  • This class claim is broader — alleging that fraud on the platform attracted customers and kept them there "causing them to incur even further losses."
  • And they are seeking damages on the basis that Celsius, among other things, violated state laws protecting consumers against fraud and false advertising, as well as English Common law that protects against "negligent misrepresentation" and "unjust enrichment."

What they're saying: "The promises that pervaded [Celsius Network Limited's] marketing were far from the reality of what actually occurred at the company," the filing states.

  • "Nor were they consistent with account holders’ reasonable expectations of what they were signing up for."

For example, Celsius repeatedly assured its customers that the platform was "safer than a bank."

  • Between the lines: It was not.

Details: Thomas DiFiore, Rebecca Gallagher, and Ignat Tuganov, customers based in different parts of the world, are the three representatives bringing the class claim on behalf of all customers harmed by the company.

  • What they have in common: They were unaware of the extent of the bankrupt platform's misrepresentations before the independent examiner's report ordered by the court was published, per the filing.

What we're watching: How many Celsius account holders will join the class claim.

Go deeper