WallStreetBets Shows Celsius Victims To Group Together On Reddit

The power of many small investors grouped together was shown in the beginning of 2021 when a Reddit forum called WallStreetBets outsmarted a New York hedge fund (causing losses of around $7 billion a month) and made the GameStop stock shoot up hundreds of percentage points, causing a small revolution.

Now, as victims of the bankrupt crypto lending platform Celsius seek a way to get some of their funds back, they are using a similar strategy: grouping together to make a larger point.

Celsius fan network on Reddit had some 47,000 members at it’s peak, boasting to each other how much everyone was earning by lending their coins through the platform. Just like the Icelandic banks back in 2007-2008, it all proved a lucid dream though.

Now, some members are using the same forum to try and recover their coins. In typical fashion for the millennial and GenZ investors of crypto, they use Reddit, Telegram and Twitter to communicate, the same social media platforms that fueled the memestocks and memecoins at first.

Skipping lunch

The group is being represented by the law firm of Togut, Segal & Segal LLP. One of the group organizers, David Little explained that

It was kind of neat — some of these guys were like, ‘I am skipping lunch today and putting $15 into GoFundMe instead,’

It was kind of crazy for a group of strangers who just went through this huge process of losing their savings to say, ‘Let’s band together.’ Without this crowd funding approach, we wouldn’t have been able to get legal representation.

The budget part of the report is not good. #celsius will exhaust its cash in October. Bankruptcy is really designed to address balance sheet not income statement issues. The Debtors are burning through cash and that will impact the price of any sale. #CelsiusBankruptcy https://t.co/PKTKpGmtlJ

— David Adler (@DavidJAdler1991) August 15, 2022

Thomas Braziel, managing partner at investment firm 507 Capital also got involved after seeing the popularity of these Celsius creditor groups on social media. His company groups together crypto bankruptcy claims and is trying to help smaller claim holders understand the procedures.

We would love to buy larger claims — $1 million and up — but that’s not why I am out there with the claimants, Braziel said I love crypto people coming to bankruptcy land. They are smart people.

It will remain to be seen whether anything will come of it and whether anyone gets any money back, but the fact that crypto fans are sticking together even in these difficult times is quite positive.