- The embattled crypto lender Celsius Network is now angling for a comeback under a new brand identity.
- The plan includes restructuring into a digital asset custody firm by managing customers’ crypto.
- However, the company’s creditors have doubts about the plan’s viability.
The embattled crypto lender Celsius Network is now angling for a comeback under a new brand identity.
According to a New York Times article, Celsius CEO Alex Mashinsky presented a strategy to revitalize the company at an employee-only meeting last week. The plan includes restructuring the ill-fated crypto loan business with an emphasis on digital asset custody, which entails holding customers’ cryptocurrency for them and then charging fees for specific transactions.
The meeting also included a legal entity representing the company’s creditors, the Committee of Unsecured Creditors.
The initiative was codenamed ‘Kelvin,’ after the temperature unit. However, according to the article, the creditor committee had grave reservations and doubts about the viability of the Kelvin plan, especially with Mr. Mashinsky’s continued employment with the business.
Celsius is one of a few crypto companies to file for bankruptcy protection after falling victim to the crypto winter and collapsing counterparties in recent months. The company rose to prominence with a marketing claim that became impossible to sustain when it promised digital asset depositors interest as high as 18 percent. This pushed the company’s controlled assets to $20 billion from over one million customers in 2021.
The report also alleged that Celsius earned significant gains by making speculative bets that suddenly went bad when the cryptocurrency market plummeted. The platform has the digital assets of tens of thousands of consumers worth $4.7 billion and is still figuring out how to compensate depositors who lost money after betting on Celsius’ high payouts.
NY Times writer David Yaffe-Bellany argued that CEO Mashinsky has no control over Celsius’s fate as any revival plan would need approval from the New York federal bankruptcy judge in charge of the proceedings.