Beautiful Virgin Islands

Monday, Oct 20, 2025

Crypto bankruptcies threaten customer life savings

Crypto bankruptcies threaten customer life savings

A judge will hear a request to honor Voyager Digital customer withdrawals

Some crypto investors are on the edge of financial ruin after trusting their nest eggs to two unregulated crypto marketplaces that went bankrupt.

Many put their life savings into virtual currency only to see their money frozen while the courts decide the fate of their investments.

Their plight has members of Congress calling for investor education and greater regulation.

Senators Debbie Stabenow, D-Mich., and John Boozman, R-Ark., introduced a bill Wednesday to give the Commodity Futures Trading Commission new tools and authorities to regulate digital commodities.

The logo of the crypto company Celsius on a computer screen June 14, 2022.


New laws will come too late for customers of Celsius Network and Voyager Digital.

One investor named Donald said he feels "completely ashamed and embarrassed" for sinking $31,000 into Voyager Digital Holdings.

"Losing this money with no end in sight has been unbearable for my family and I," Donald said. "I wake up most nights and just walk up and down the stairs contemplating on my own mistakes and wondering if this will ever end."

John Dalisay, who is paralyzed from the neck down, sent a letter to a judge saying he is depressed and unable to work after his life savings were frozen.

"I already suffered a tragic loss of my ability to ever walk again and did my best to be strong and fight to start over with my life," Dalisay wrote. "I feel humiliated and defeated."

Dalisay invested money from his $8-per-hour job at Celsius Network.

"I do not seek luxuries, your honor," he wrote. "I only wanted to be able to afford basic necessities. Please help me be whole again as this situation Celsius created is wreaking havoc on my mental health."

Voyager customers asked a judge to unfreeze their accounts. A hearing on that motion is scheduled for today.

Crypto lender Celsius and crypto broker Voyager Digital filed for Chapter 11 bankruptcy in July, freezing their customers’ assets. Celsius has 1.7 million customers and $6 billion in assets. Voyager counts 3.5 million users and over $5.9 billion of cryptocurrency assets.

Corporate bankruptcies are generally battles between rival groups of Wall Street investors backed by lawyers who often bill $1,000 or more per hour.

The Celsius and Voyager cases are exceptions. Everyday investors are flooding the courts with desperate pleas asking for their money back.

"There’s rarely enough money to cover the investor," said Melanie Senter Lubin, president of the North American Securities Administrators Association, who testified last week at a Senate Banking Committee hearing on crypto fraud.

"If those investors are considered unsecured creditors, they’re going to be put in the pool with everybody else, and they’re typically at the end of the line."


Safer than a bank?


Celsius and Voyager promoted the safety of their investments.

"Celsius stated overwhelmingly … that putting our funds into [their] custody was much safer than having it at a regular bank account," wrote Paul Niehe, who transferred his pension savings into crypto.

Ryan Hourigan invested a portion of his paycheck into Voyager every month on top of rolling his life savings into his account.

"I used Voyager to replace my savings account as it was advertised as FDIC insured," Hourigan said. "I am now filled with regret for doing so and fear that I pretty much lost everything for trusting this company."

"They made astonishing claims, like offering up to 20% interest while claiming they were FDIC insured and quote ‘safer than banks,’" Sen. Elizabeth Warren, D-Mass., said at last week’s hearing. "No risk. Twenty percent return. That was a lie from the start."

This May 4, 2021, file photo shows the Federal Reserve building in Washington.


The Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve have ordered Voyager to stop making false and misleading statements concerning its FDIC deposit insurance status and to take immediate corrective action.

Celsius allowed customers to get loans in real dollars by using their crypto holdings as collateral. Customers could also earn interest by lending their deposited coins, according to the company's white paper.

Voyager offered a secure way to trade over 100 different crypto assets using a mobile app and advertised rewards on more than 40 cryptocurrencies, the company's white paper said.

At least one person has turned to crowdfunding for help. Eduardo Dorrance wants to save his family’s animal rescue with a GoFundMe campaign. His family is a month away from losing the business.


Crypto winter
The Binance Exchange website on a laptop computer arranged in Dobbs Ferry, N.Y., Feb. 20, 2021.


Crypto investors who used other platforms are not immune from losses.

Cryptocurrencies lost an estimated $2 trillion in value since peaking last year in a market collapse nicknamed the "crypto winter."

Bitcoin, the biggest cryptocurrency, topped out at $68,789 per coin Nov. 10, 2021, before falling to a low of $17,709 June 18, according to CoinMarketCap data.

"It’s very important that people understand how a particular investment works, how they could lose money in the investment, what they pay for that investment, and what recourse they have," Gerri Walsh, senior vice president of investor education at the Financial Industry Regulatory Authority, said.

"When this is happening outside the space of regulation, the recourse of investors can be difficult."

Walsh testified at the Senate hearing.

Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
China Warns UK of ‘Consequences’ After Delay to London Embassy Approval
France’s Wealthy Shift Billions to Luxembourg and Switzerland Amid Tax and Political Turmoil
"Sniper Position": Observation Post Targeting 'Air Force One' Found Before Trump’s Arrival in Florida
Shouting Match at the White House: 'Trump Cursed, Threw Maps, and Told Zelensky – "Putin Will Destroy You"'
Windows’ Own ‘Siri’ Has Arrived: You Can Now Talk to Your Computer
Thailand and Singapore Investigate Cambodian-Based Prince Group as U.S. and U.K. Sanctions Unfold
‘No Kings’ Protests Inflate Numbers — But History Shows Nations Collapse Without Strong Executive Power
Chinese Tech Giants Halt Stablecoin Launches After Beijing’s Regulatory Intervention
Manhattan Jury Holds BNP Paribas Liable for Enabling Sudanese Government Abuses
Trump Orders Immediate Release of Former Congressman George Santos After Commuting Prison Sentence
S&P Downgrades France’s Credit Rating, Citing Soaring Debt and Political Instability
Ofcom Rules BBC’s Gaza Documentary ‘Materially Misleading’ Over Narrator’s Hamas Ties
Diane Keaton’s Cause of Death Revealed as Pneumonia, Family Confirms
Former Lostprophets Frontman Ian Watkins Stabbed to Death in British Prison
"The Tsunami Is Coming, and It’s Massive": The World’s Richest Man Unveils a New AI Vision
Outsider, Heroine, Trailblazer: Diane Keaton Was Always a Little Strange — and Forever One of a Kind
Dramatic Development in the Death of 'Mango' Founder: Billionaire's Son Suspected of Murder
Two Years of Darkness: The Harrowing Testimonies of Israeli Hostages Emerging From Gaza Captivity
EU Moves to Use Frozen Russian Assets to Buy U.S. Weapons for Ukraine
Europe Emerges as the Biggest Casualty in U.S.-China Rare Earth Rivalry
HSBC Confronts Strategic Crossroads as NAB Seeks Only Retail Arm in Australia Exit
U.S. Chamber Sues Trump Over $100,000 H-1B Visa Fee
Shenzhen Expo Spotlights China’s Quantum Step in Semiconductor Self-Reliance
China Accelerates to the Forefront in Global Nuclear Fusion Race
Yachts, Private Jets, and a Picasso Painting: Exposed as 'One of the Largest Frauds in History'
Australia’s Wedgetail Spies Aid NATO Response as Russian MiGs Breach Estonian Airspace
McGowan Urges Chalmers to Cut Spending Over Tax Hike to Close $20 Billion Budget Gap
Victoria Orders Review of Transgender Prison Placement Amid Safety Concerns for Female Inmates
U.S. Treasury Mobilises New $20 Billion Debt Facility to Stabilise Argentina
French Business Leaders Decry Budget as Macron’s Pro-Enterprise Promise Undermined
Trump Claims Modi Pledged India Would End Russian Oil Imports Amid U.S. Tariff Pressure
Surging AI Startup Valuations Fuel Bubble Concerns Among Top Investors
Australian Punter Archie Wilson Tears Up During Nebraska Press Conference, Sparking Conversation on Male Vulnerability
Australia Confirms U.S. Access to Upgraded Submarine Shipyard Under AUKUS Deal
“Firepower” Promised for Ukraine as NATO Ministers Meet — But U.S. Tomahawks Remain Undecided
Brands Confront New Dilemma as Extremists Adopt Fashion Labels
The Sydney Sweeney and Jeans Storm: “The Outcome Surpassed Our Wildest Dreams”
Erika Kirk Delivers Moving Tribute at White House as Trump Awards Charlie Presidential Medal of Freedom
British Food Influencer ‘Big John’ Detained in Australia After Visa Dispute
ScamBodia: The Chinese Fraud Empire Shielded by Cambodia’s Ruling Elite
French PM Suspends Macron’s Pension Reform Until After 2027 in Bid to Stabilize Government
Orange, Bouygues and Free Make €17 Billion Bid for Drahi’s Altice France Telecom Assets
Dutch Government Seizes Chipmaker After U.S. Presses for Removal of Chinese CEO
Bessent Accuses China of Dragging Down Global Economy Amid New Trade Curbs
U.S. Revokes Visas of Foreign Nationals Who ‘Celebrated’ Charlie Kirk’s Assassination
AI and Cybersecurity at Forefront as GITEX Global 2025 Kicks Off in Dubai
DJI Loses Appeal to Remove Pentagon’s ‘Chinese Military Company’ Label
EU Deploys New Biometric Entry/Exit System: What Non-EU Travelers Must Know
Australian Prime Minister’s Private Number Exposed Through AI Contact Scraper
Ex-Microsoft Engineer Confirms Famous Windows XP Key Was Leaked Corporate License, Not a Hack
×