About a week ago, a settlement was reached between Celsius and Celsius Custody account holders. As a result, the latter group was promised a refund of up to 72.5% – half on the spot and half by the end of the year – provided they signed away their right to further litigation.
Earn Users Hung Out to Dry
However, the vast majority of users did not have Custody accounts. Owners of Earn accounts were not promised a refund, as the judge agreed that Celsius’s ToS proved that the customers had signed over their crypto. The only compensation promised to these clients was equity in a new company founded by the deal’s sponsor.
Luckily for some Earn users, there is a silver lining.
Yesterday evening, Ray Youssef – Paxful’s CEO – announced he would be refunding those in the Paxful community who were also Celsius Earn users.
We have done the right thing and refunded @paxful users who lost funds with Celsius Earn. I could not stand by and watch them suffer, so we’ve made them whole. Our users always come first to me, this is the way ! pic.twitter.com/aQox7qspOh
— Ray Youssef (@raypaxful) March 29, 2023
Refunded Out of Pocket
Although the cross-section between Celsius Earn users miffed by the refund agreement and Paxful users is relatively small, the gesture will make whole some of those who had previously lost hope in seeing their funds again.
It’s unclear exactly how many users are involved – however, Youssef confirmed that the total refunded amount will be around 8.8 BTC, which would be taken from Paxful’s coffers.
Youssef also apologized to the community for prior involvement with Celsius via Paxful Earn, stating that he and his company should have known better than to trust the high APY returns promised.
Originally, Paxful staff believed the bankruptcy deal reached by Celsius and its creditors would include creditors connected to the case via third-party contracts like those of Paxful Earn.
Unfortunately, it quickly became clear to Paxful that trying to refund mutual customers from the settlement in question was a lost cause.
“They kept holding out hope that users may be credited but the fine print made it clear that only their direct users had that chance not those coming in from other cos like Paxful. No way they are going to do right thing for folks from the Global South We had to step up.”
The news was met with applause from fellow crypto space entrepreneurs and investors alike, who commended Youssef for leading by example and putting users first. With any luck, this will inspire other entrepreneurs in similar situations to continue the trend.
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