Just two weeks after appearing in an ask me anything (AMA) with Celsius founder Alex Mashinsky, crypto Youtuber Ben Armstrong has announced he intends to file a class-action lawsuit against the lending platform and its chief executive.
Armstrong made legal threats via Twitter on Wednesday and has since provided more detail in multiple threads. Armstrong stated that he is currently working through the process of getting all “disclosures, documents, loan details, etc” put together while speaking to attorneys to explore the best ways to go about the class action. Co-plaintiffs have yet to be added as Armstrong hasn’t “officially began moving.”
BitBoy Crypto is the second most subscribed crypto YouTube account with roughly 1.45 million subscribers and primarily provides commentary on market news/events. The channel is only behind Coin Bureau and its 2.07 million subscribers. BitBoy Crypto has plenty of detractors, too, some of whom allege that he has been paid to promote dubious crypto assets in the past.
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Armstrong’s sentiments toward Celsius have swung wildly from just two weeks ago when he was featured on the ask me anything (AMA) session with Mashinsky on Celsius’ YouTube channel. “And today I’m the victim. Kicking myself for wondering how I let this get so bad and so far,” he said.
Celsius is battling either insolvency or it’s experiencing severe liquidity troubles as a result of the crypto market plunge. The firm paused withdrawals on Monday, and also reportedly shifted around $320 million worth of assets to pay down loans and avoid liquidation on decentralized finance (DeFi) platforms such as Aave.
One issue to a potential lawsuit, however, is if Celsius files for bankruptcy because it will trigger a provision called “automatic stay,” which would prevent creditors from pursuing collection activity against the firm.
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Celsius has reportedly onboarded restructuring lawyers from Akin Gump Strauss Hauer & Feld to find potential solutions for its financial troubles. However, Armstrong claims that these types of lawyers “specialize in MOSTLY preparing companies for bankruptcy.”
“Even if Celsius does file bankruptcy, we have discovered some potential workarounds to still do a class action lawsuit (not effected by bankruptcy). Unfortunately I have to keep that one close to the vest for now,” he said. Sourch: Cointelegraph