Celsius may refund customers with wrapped assets
Executives at Celsius Network are proposing to pay back customers by issuing new wrapped assets to trade on other platforms, a new leaked recording has revealed.
In the recording posted by Tiffany Fong, Celsius’ executive Nuke Goldstein, co-founder and CTO, appears to explain the company’s proposal to refund Earn customers in more depth.
Fong is a Celsius customer and public figure credited with publishing the previously leaked All Hands meeting recording.
According to The Block, the plan is to funnel Celsius’ remaining funds allocated to customer refunds into wallets. Next, the company will issue wrapped tokens – known as Cx tokens – to represent the ratio of how much the firm owes to how much it has on hand.
Wrapped tokens will be available for customers to redeem, or they can wait for a larger payout when additional revenue arrives. The firm stated that when Goldstein pointed to incoming mining, it bet ETH earnings and other coins that could become liquid.
“So the more you wait, the greater the chance that the gap will be closed,” he said on the recording. “But you can always redeem.”
Along with redemption, customers will also have a choice to trade the wrapped tokens at other venues, Goldstein said. Users will be able to withdraw their tokens and go to Uniswap or other platforms and let the market price the tokens, he said.
According to Fong, she had obtained the new recording on September 1, before she received the leaked all-hands meeting recording.
In another recording released two weeks ago, CEO Alex Mashinsky outlined a plan to revive the company, codenamed Kelvin, at an all-hands meeting.
The creditors’ committee confirmed that Mashinsky had met with them and put forward a proposal. The creditors’ committee safeguards the interests of customers and creditors in the bankruptcy proceedings.
Celsius entered Chapter 11 proceedings in July after it suspended withdrawals, citing “extreme” market conditions. The case is now before the court.
The firm revealed that three of its corporate entities held $23 million worth of stablecoins. While the company currently owns 11 different forms of stablecoins, it did not disclose which ones.
According to a court filing, the bankrupt crypto lender filed a request on September 15 for permission from the bankruptcy court to sell its stablecoin holdings to fund its Chapter 11 cases.
The New Jersey-based firm intends to sell its current and any future stablecoins it may receive, as needed, to generate liquidity to fund its operations, Blockchain.News reported.
If Presiding Judge Martin Glenn, the top U.S. bankruptcy judge, approves the proposal, the sale process will primarily pay for Celsius Network’s operations.
In another development, a neutral third party has been created to investigate Celsius’ finances.
The move was approved by a US bankruptcy judge in the Southern District of New York in early September, following a request by the Justice Department, securities regulators and representatives of creditors.
Celsius did not object to the investigation by a neutral third party.
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