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According to leaked audio obtained by CNBC, crypto lender Celsius wants to create an IOU cryptocurrency to repay customers. The audio was provided by a Celsius customer, and the recording explains that the bankrupt crypto lender wants to create a form of “wrapped tokens” that represent a ratio between what customers owe and what the firm has left on its balance sheet. Pitch claims that if Celsius customers hold onto their tokens, there is a possibility that financial losses could be reduced.
After a court-appointed examiner was added Celsius bankruptcy case and the crypto lender sought to reopen withdrawals for specific customers, leaked audio obtained by CNBC details that Celsius is reportedly looking to create an IOU cryptocurrency.
It all started 103 days ago on June 12th at 10:10 PM (ET), when Celsius told the public that it was stopping “all withdrawals, exchanges and transfers between accounts.” A month later, following several insolvency and restructuring rumors, Celsius filed for Chapter 11 bankruptcy protection.
Celsius is not the first crypto company to create a token to repay debt, as the plan was exploited by Bitfinex after the exchange lost close to 120,000 BTC in the breach in 2016. The exchange initially issued “Recovery Rights” coins called BFX tokens, and by April 2017, the stock exchange said that the debt had been paid in full.
The Celsius audio obtained by CNBC originated from a customer named Tiffany Fong, and the news outlet was able to confirm that the audio was “authentic” from former Celsius employees. The audio reportedly features Celsius co-founders Nuke Goldstein and the company’s chief technology officer Guillermo Bodnar.
According to the audio, a specific type of “wrapped tokens” will serve as IOUs, and the company’s mining operations and staked ethereum could help provide support. Two days before Celsius stopped withdrawals, crypto supporters were discovered a large amount of Lido’s staked ether (STETH) allegedly linked to the crypto lending firm.
Goldstein says the plan will be applied to customers who took advantage of the “Earn” account. Bodnar explained in the audio that the IOU token idea was in its “early stages,” and part of the audio shared exclusively with CNBC says Bodnar describes another plan to bolster the compensation idea.
He summarized a “transaction management system,” CNBC’s Paige Tortorelli and Kate Rooney report, and the system will aim to provide Celsius customers with better “transparency.”
“Transparency is not only reflected in how we communicate, but making sure that everything that is done within our platform is traceable, is auditable, end-to-end — we have nothing to hide,” Bodnar said in the audio.
Celsius has already distributed a token called the Celsius network (CEL) that was supposed to be the “backbone of the Celsius network.” CEL was intended to create a “value-driven lending and borrowing platform” for all members.
At the time of writing, there is a circulating supply of 423,415,980 CEL today. CEL is down 80.6% from the crypto asset’s all time high, and it has seen $8,280,796 in global trading volume worldwide.
The most active exchange today in terms of CEL trades and liquidity is Digifinex. Also, a small fraction of CEL supporters attempted a so-called short squeeze with CEL in July, and the attempt ultimately failed.
What do you think of the leaked audio that says Celsius wants to issue an IOU token for cryptoassets to pay back “Earn” customers? Let us know what you think about this topic in the comments section below.
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