The failure of experimental crypto bank Celsius Network was one of the main causes of this spring’s crypto crash, removing nearly $1 trillion from the market and ruining thousands of investors. I was.
Celsius filed for bankruptcy in July. Now it’s fishing for a comeback.
At a meeting with employees on Sept. 8, Celsius CEO Alex Masinsky outlined a bold plan to revive the company, according to a transcript of the event shared by The New York Times. He and another Celsius executive, Oren Bronstein, said they wanted to rebuild the company with a custody focus on storing people’s cryptocurrencies and charging fees for certain types of transactions. And the project was codenamed Kelvin, after the unit of temperature.
Mashinsky, 56, faced skeptical questions from employees. He compared the turnaround process to the corporate turnarounds of some of the world’s most famous brands, including Pepsi, which went bankrupt in 2018. 1923 and 1931.
“Does it make Pepsi taste bad?” Mr. Mashinsky asked the employee. “Delta has filed for bankruptcy.
Meeting recording sent Tiffany Fongthe Celsius customer who created YouTube video About spring accident. She shared the recording with The Times, which independently confirmed its authenticity.
In a statement, a Celsius spokesperson said the company holds regular internal meetings to “Prepared for any scenario”
“Our employees are at the heart of our commitment,” the statement said. “We will continue to rely on them to assist us in preparing any necessary requirements to execute our final recovery plan as soon as possible.”
Celsius’ revival efforts come at a time of transition for the crypto industry as the reckless start-ups that sparked the recession attempt to reorganize.In recent months, other instigators of the crash, including Do Kwon, founder of the bankrupt cryptocurrency Luna Trash Talk, have also pursued A fresh crypto venture.
Celsius became famous for marketing promises that ultimately proved impossible to keep. Deposit digital assets and receive interest as high as 18%. The company also allows customers to take out loans against their deposits or participate in “staking”. In 2021, Celsius managed her $20 billion worth of assets and had 1 million customers.
However, while Celsius generated high returns by making high-risk investments, it quickly deteriorated when the cryptocurrency market crashed. Tens of thousands of customers still lock their digital assets into the platform. In court this summer, Celsius reported to his clients that he owed $4.7 billion.
The fate of Celsius is not in Mr. Mashinsky’s hands. Both proposals require approval from New York bankruptcy judge Martin Glenn, who is overseeing the process. The result can take many forms, such as the buyer purchasing a part of the company.
At an employee meeting, Mashinsky said Celsius plans to work with the legal entity representing the company’s creditors, a group known as the Unsecured Creditors Commission (UCC), to get back to business. Stated.
“Most of our community, including UCC, have asked us to continue with the services,” he said. We want to continue using staking, custody, etc.”
But after meeting with Celsius representatives, the committee became concerned about Mr. Mashinsky’s continued involvement with the company, according to a person familiar with the matter, and raised serious questions about the feasibility of the Kelvin plan. It is said that
A lawyer for the commission declined to comment.
The exact details of Celsius’ reopening plans remain unknown. The company has a Bitcoin mining business and could become part of the reorganized business. But at the conference, Mashinsky and Bronstein focused on the possibility of storing crypto assets for Celsius users. Mashinsky said he could imagine charging customers to access special and highly secure cryptocurrency wallets.
“When our business is based on custody and our customers choose to invest somewhere else, exchange one asset for another, or take out a loan against an asset as collateral. , we should be able to charge a fee,” Bronstein told employees.
Since Celsius filed for bankruptcy, customers have been scrambling to get their crypto back, raise money to hire lawyers, and strategize in Telegram group chats. At the meeting, Bronstein said the company was planning a “unique cryptocurrency solution” to compensate customers, but did not provide details.
Bronstein also said Celsius is at a key point on a “hero’s journey” toward salvation.
“This hero has a mission, which is what they want to accomplish. They experience their initial successes, they stumble, they fail in some way, and they have this dark moment,” he said. If we succeed, it will be a success story like no other.”
Even Apple once considered bankruptcy an option, Mr. Mashinsky said.
“Are we going to be trashed by a company that was great, almost great, or was great for a while and then disappeared?” he said. “Community is behind us.”
Kitty Bennett contributed research.