Earn Ad HocDashboard

Subject: Huge news for Celsius Earn customers

Dear Celsius Earn Customer,

Huge news: Celsius Earn Customers have launched an official Ad Hoc Group^[1]–just like the Custody and Loans Ad Hocs–and have secured advice and representation from Joyce Kuhns and Jason Nagi–top bankruptcy and FinTech attorneys from Offit Kurman who have been following the Celsius case for months and are hitting the ground running!

We’re in this to negotiate fair and equitable treatment–including transparency on what’s left for distribution to Earn customers, what our liquid crypto distribution will be, and what any settlements cost Earn–and, overall, a plan that’s better for Earn customers. We’re teeing up meeting with Celsius’s legal counsel and the UCC to push for a seat at the table for Earn and a plan that does right by us. We’re fighting for optionality–or choices–for Earn customers. For example, Loans has two treatments to pick from while, so far, Earn has only one treatment and no transparency on our liquid crypto distribution or what that treatment will look like.

We’re also standing strong against the Preferred Series B shareholders–well-heeled institutional investors and hedge funds who have been extremely active intervenors in this case since the beginning. They are making a brazen attempt to run away with Earn customer assets and have teed up months of litigation to do so!^[2]

If you would like to support our efforts, click here and donate $50, $500, or whatever you can afford via GoFundMe.

Just like other Ad Hoc groups, we are fighting for a better outcome for all Earn Customers (and all customers).

We will also work to find ways that some lower dollar contributors (under $5,000) can officially become members who disclose in the court docket soon^[3]. But in the meantime, your donation via GoFundMe will help us fight for fair and equitable treatment among all creditors (something no other ad hoc group can say they support, as all other ad hocs are trying to get more at the direct expense of Earn customers.)

If you would like to officially join the Ad Hoc and become even more involved, meaning you would have access to our lawyers, and be listed in our disclosure–with a donation of $5,000 or more for the time being, and completing the vetting process–you can email info@earncommittee.org. In your email, please include your name, your balances by coin and account type, and your clawback exposure (if any.) We need this information to report to the Court for official members and for vetting. We understand that that this level of support and dedication isn’t something everybody wants to do–or can afford to do–this is why we offer the GoFundMe option, which is consistent with the Custody and Loans Ad Hoc Groups that have formed in the past. Please also stay tuned for ways that you can join for less, and/or with crypto, in the future.

The Loans group is claiming that their proposed plan benefits Earn. They claim that they would be paying 60% in interest over 6 years. But that interest is only on the amount of stablecoins or fiat they borrowed against their crypto. Assuming person A has a $30,000 loan, “backed”^[4] with 4x collateral (4 Bitcoin worth $114,000 at today’s prices), they would pay the 60% interest (over 6 years) only on the $30,000,or $18,000 in interest over time. And, at the end of it, they get back the 4 Bitcoin, regardless of the value of the Bitcoin at the end of the term. If Bitcoin is worth $250,000 in 6 years, then they would pay $18,000 in interest but get back $1,000,000 in Bitcoin–a 55x return. The later they fully repay the loan, the more of the collateral they would get back, and the smaller the haircut. In fairness, there are also proposed fees for electing borrowers which make it somewhat more fair, but there is no public transparency on those fees yet, and, so far as we can tell, there are ongoing negotiations to reduce fees at Earn’s expense or to exit with 100% of collateral and to have plans cater to niche groups of creditors rather than Earn. In addition, various regulators are objecting to parts of the plan which include penalties for early prepayment, saying such provisions violate state law. If the regulators' objections are sustained, it is very likely that Loans will fight to get 100% of their collateral as soon as we exit bankruptcy–or potentially sooner–without having to pay any interest at all. This would, clearly, be fatal to Earn’s recovery and an outcome that we will have to protect ourselves against. (Loans also continues to push the envelope and push bidders to sweeten their recovery and reduce their fees even more. This is one of many reasons why having counsel, and a seat at the table to discuss the nuances and protect Earn’s interests, is so important.)

Thanks to initial support from some Top 50 Earn creditors, the Ad Hoc Group of Earn Customers is off to a strong start. But we need a broad base of support. If the Earn Ad Hoc does not have sufficient funding, its ability to participate in negotiations, including with bidders, and with Celsius and the UCC will be much more constrained. That is why we need your support. Please give if you can.

And, if you are able to contribute $5,000 or 0.5% of your account balance, whichever is more, then please email info@earncommittee.org. If not, you can donate to the GoFundMe page to help support the Ad Hoc in its fight for Earn! To be clear, at this time, smaller donations such as $20, $100, etc, will not become official Ad Hoc members at this time (for various reasons, such as the fact that the administrative expenses of signing you up will become more than your donation), but the Ad Hoc will be working towards improving the plan and recoveries for all Earn Account holders, and not just Ad Hoc members.^[5] We also will be working on ways to keep expanding the number of disclosing members in the docket, for those who are interested. If for whatever reason, sometime in the future, there is an improved recovery for only Ad Hoc members (we think this is unlikely, and will be working to improve recoveries for all Earn Account holders), we will do our best to sign up everyone who donated!

Thank you for standing with us.

–Immanuel, and the rest of the Ad Hoc Group of Earn Account Holders