Celsius has become the latest cryptocurrency company to file for bankruptcy as the bear market bites harder.
DoNotPay CEO Joshua Browder told CoinDeskt TV in a recent interview that the company is committed to helping people sue cryptocurrency lending platform Celsius.
Celsius paused withdrawals on its platform a few weeks ago, citing unfavourable market conditions. The company has now filed for Chapter 11 bankruptcy as it continues to struggle.
With users unable to withdraw their assets for a while now, Browder said the company would help people file lawsuits against Celsius.
Browder explained that a loophole in Celsius’ terms of service (Section 27 C) grants individual investors the ability to file a lawsuit against the company in small claims court.
However, the claims must be below the $10,000 threshold, and Browder believes this loophole will help small investors. He said;
“It’s likely that small claims court judges will side with consumers. We believe Celsius isn’t actually going to show up to a lot of these cases … it’s often the case where corporations feel like it’s more expensive to actually hire a lawyer to defend themselves than it is to get a default judgment against them.”
Browder added that Celsius has more significant problems than worrying about “if a consumer sues for $5,000 in a rural Colorado town, in their local small claims court.” He added that it is important to get the smallest investors to the front line so they can be paid faster.
The DoNotPay CEO said some investors wrote to the company seeking help when the Celsius crisis began. He further explained that the courts would be focused on any disclosures Celsius may have failed to make.
Browder believes that Celsius didn’t disclose the risks involved, adding that his company is currently looking at pending withdrawals initiated before the freeze.
Celsius was one of the leading cryptocurrency lending firms but has now gone in the way of Voyager Digital and filed for bankruptcy.