Fintech files: Celsius lawyers get started, search for Three Arrows founders continues
For Celsius Network, it’s out with the old, in with the new.
Directors of the difficult crypto-lender have replaced their lawyers, after tensions arose between the firm’s top executives and their legal advisers.
Celsius will hope their new lawyer, the American law firm Kirkland & Ellis, is more receptive to their plan to avoid going bankrupt. Their predecessors, from Akin Gump Strauss Hauer & Feld, were started because they had recommended a bankruptcy, according to people familiar with the matter.
An insider told Financial news that Kirkland was already “more receptive” to the idea of using Celsius’ customer base for support. They added that former advisers from Akin Gump “did not understand crypto”.
Akin has been contacted for comment.
HODL may still be on the table
That begs the question – does anyone understand crypto?
Celsius’ internal plan involved using the ‘HODL’ function on the app to vote for customers on whether they still believe in keeping the company open.
The ultimate goal would be to reopen withdrawals, but with a monthly limit on how much customers can withdraw, in an attempt to protect against a race on Celsius’ assets.
However, this is far from a complete agreement. Kirkland also serves as a restructuring advisor to other crypto lenders Voyager Digital, which did end up filing for bankruptcy on July 6th.
Each cloud …
However, not all bad news in crypto countries. Two prominent experts told UN last week that the recent crash will finally create a more mature, sophisticated industry.
Ari Redbord, head of legal and government affairs at blockchain intelligence firm TRM Labs, described the recent wave of corporate collapses and job losses as “a recovery of less sophisticated projects”.
He added: “We will see a completely different kind of crypto transition than what we had seen coming out of this winter.”
Redbord, a former senior financial intelligence adviser to the US Treasury Department, spoke at a Barron’s Live webinar hosted by the UN, along with Gwendolyn Regina, investment director at Binance’s blockchain division BNB Chain.
Listen to the webinar here.
Binances Regina also struck a positive note. She said that in the midst of the deluge of negative headlines, people would turn to innovation in blockchain, crypto’s underlying technology, instead of being caught up in the hype that accompanies soaring cryptocurrencies.
“There are solid projects being built and there is solid innovation,” she said. “On a daily basis, I talk to a lot of builders and entrepreneurs, and especially in a bear market, it’s great because the valuation is down and people are much more realistic.”
Leave the ship?
The saga surrounding the collapsed crypto hedge fund Three Arrows Capital took a new turn after liquidators were met with a pile of unopened mail and a locked door when they recently visited the firm’s office in Singapore.
In a New York lawsuit, liquidators Russell Crumpler and Christopher Farmer reported that the whereabouts of founders Zhu Su and Kyle Davies “are currently unknown.”
The submission on July 8 stated: “And while a lawyer in Singapore who pretended to represent the founders, recently approached foreign representatives [the liquidators]the founders have not yet begun to cooperate with foreign representatives in any meaningful way. “
It added that there was an “increased risk” founders could try to move Three Arrows’ assets to new accounts or cryptocurrencies, because “a significant portion” is “cash and digital assets that are easily transferable.”
Meanwhile, the Three Arrows’ failure has continued to send ripples through the crypto world. Broker Voyager Digital said it applied for Chapter 11 bankruptcy protection on July 6. Three Arrows recently defaulted on a large loan from a unit in Voyager.
Also in Singapore …
Bank of England Deputy Governor Jon Cunliffe gave a speech at the British High Commission in Singapore, in which he outlined Britain’s recent proposal that the central bank should step in if the issuer of a stable coin should now “systemically fail”.
He indicated that the bar for a stack coin to be large enough that it would not have a “systemic scale” effect would be high enough that no one existing right now would reach it.
“I doubt that any of the stable currencies currently in operation in other jurisdictions will meet the necessary standards for systemic level operations in the UK – whether in the crypto world, should it become systemic, or in conventional financial services. “
Elsewhere in fintech
NFT startups may have a tough time during cryptocurrency, but some have a creative new solution: Hire a “chief vibes officer,” reports the Guardian.
In the meantime, have Wall Street Journal has an overview of the biggest winners and losers from Klarna’s dramatic value cut.
And the cryptocurrency sale Decrypt reports on how bitcoin mining in Texas has been hit by a heat wave in the US state, where the state’s power grid has already been pushed to the breaking point.
To contact the author of this story with feedback or news, email Alex Daniel
