Celsius Gets Cash Infusion From Prime Trust as Scammers Target Customers

Nefarious fraudsters impersonating attorneys involved in the bankruptcy proceedings have been reaching out to Celsius’ creditors

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Blockworks exclusive art by Axel Rangel

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As if a prolonged bankruptcy wasn’t enough, court documents show the story of defunct crypto lender Celsius has a new wrinkle: scammers impersonating lawyers involved in its Chapter 11 proceedings.

The attempted scams are the latest headache for Celsius, which halted withdrawals and related customer activities in July, citing “extreme market conditions.” 

“Our ultimate objective is stabilizing liquidity and restoring withdrawals, [swaps], and transfers between accounts as quickly as possible,” the company wrote in a blog post at the time. “There is a lot of work ahead as we consider various options, this process will take time, and there may be delays.”

In its latest setback, attorneys for Celsius said in court filings earlier this week that a number of unidentified would-be nefarious actors have been reaching out to its creditors, posing as Kirkland & Ellis attorneys. The attempts, largely carried out over email, seem to have been intended to persuade customers — whose accounts have been frozen for months — to hand over sensitive information in a bid to gain access to their accounts.  

The emails included links to shared spreadsheets, where recipients were told to share their personal information. The industry publication Law360 first reported the news of the attempted scams. It’s not clear if any of those efforts were successful, at least in the eyes of the hackers.

Prime Trust settlement moves ahead — with a twist

But it’s not all doom and gloom for Celsius. A proposed settlement with Prime Trust — the crypto custodian that agreed to give back to the bankrupt company about $17 million of its assets — is moving along. 

That was just a start, according to court records reviewed by Blockworks. An amended settlement proposal found that Prime Trust also owes Celsius 7.4 bitcoins, 1,145.5 CEL tokens, 248.5 ether and about $364,000 of the stablecoin USDC.

The assets, which should be incoming if both parties agree to the settlement along with the bankruptcy court, would not fill the role Celsius is in — hundreds of millions of dollars deep. But every bit moves the needle incrementally in terms of recouping funds for customers-turned-creditors — whom Celsius has always maintained are its top priority. 

A spokesperson for Celsius did not return a request for comment, and a spokesperson for Prime Trust declined to comment, citing the unsettled litigation.

In the meantime, visitors to Celsius’ website receive a pop-up informing them of the pending bankruptcy — and pointing out the obvious: It’s no longer business as usual — with a link to another site set up specifically to disseminate information about the proceedings. 

The defunct digital asset lenders’ careers page, however, still says Celsius has “open positions in every department” and is “growing rapidly.”


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