Celsius Network’s stranded customers recently expressed their anger and frustration with distressed asset investors including digital asset giant NovaWulf Digital Management. The creditors and customers have accused such investors of taking advantage of their plight and scooping up Celsius’ bankruptcy claims at a discount.
A Celsius creditor who goes by Tony V on Twitter recently shared a video from Miami Bitcoin Conference 2023 which featured Thomas Braziel and Jason New, the men who co-founded NovaWulf LLC. The co-founders were reflecting on their experience as distressed investors, which involves investing in distressed firms such as Celsius, BlockFi, FTX, etc.
While addressing the conference, the NovaWulf executives shared how they were able to buy the bankruptcy claims from Celsius’ creditors at a considerable discount. Tony V expressed his anger at the distressed investors getting excited to buy the assets of helpless creditors for cheap. Fellow creditors in the comment agreed and added that NovaWulf’s investing style was predatory.
One of them pointed out the inequality between Celsius’ creditors, where those who managed to withdraw their assets had an unfair advantage over those who had to sell their claims.
Less to do with the purchase itself than how it illustrates the deep inequity between Celsius victims.
— Cam Crews (@camcrews) May 24, 2023
Those who withdrew have disproportionate access to resources than someone so desperate they need to sell their claim. Great advertisement for clawbacks @CraigParkin88 https://t.co/eAJ6faSmfy
One of the creditors highlighted a recent bankruptcy claim purchase made by crypto influencer Aaron Bennett. According to a filing made with the U.S. Bankruptcy Court for the Southern District of New York, a Celsius creditor named Michael Arabian sold his claim against the bankrupt crypto lender to Bennett. The claim contained 1.02 BTC, 4.12 ETH, and 0.38 USDC.
The influencer defended his purchase by arguing that buying the bankruptcy claim was in the interest of an open market and a free marketplace which is a cornerstone of the blockchain space. He added, “Both parties have full disclosures and there is no trickery of any kind.”
Celsius’ bankruptcy claims are available on online marketplaces like Xclaim and Cherokee Acquisition at a considerable discount. Xclaim’s website has listed claims worth nearly $2 million against the Celsius Network, selling at discounts of up to 22%. The highest claim, worth $813,000, is currently selling for a discount of almost 5%.
