The restructuring plan for the Celsius Network crypto-lending platform includes the issuance of wrapped tokens. This was allegedly stated by the co-founder and CTO of the firm Nyuk Goldstein.
Thanks @TiffanyFong_ for sharing this. You could have kept it to yourself, but you chose to share it with fellow #celsian .
Until we remove @mashinsky plans will fall on deaf ears. He doesn’t deserve another chance, he is a known quantity. I will not get rugged twice from him. https://t.co/t2MWbdkpfx
— ALLEN (@aryeh_newman) September 21, 2022
A platform client Tiffany Fong published an audio recording obtained from an anonymous source of a voice allegedly belonging to Goldstein. In it he outlined a plan according to which Celsius would issue a family of wrapped tokens backed by the customers’ frozen funds.
For example, bitcoin holders awaiting repayment would receive CxBTC tokens. The latter would represent the ratio of the platform’s liabilities to the cryptocurrency on its balance sheet.
Customers can redeem the wrapped tokens or wait for larger payouts when the mining subsidiary slated to launch, Ethereum staking, and asset sales that could become liquid generate additional income.
The proposal must receive court approval.
“The longer you wait, the greater the chances that the discount will be liquidated. You will always have the option to redeem,” — Mr. Goldstein explained.
In addition to the redemption mechanism, Celsius allegedly plans to enable trading wrapped tokens on platforms such as Uniswap.
On June 13, the crypto-lending platform suspended withdrawals, exchanges and transfers between accounts.
A month later Celsius and certain affiliated entities filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code.
The platform introduced a business-reorganization plan designed to use the income from the mining subsidiary to satisfy creditors’ claims. Celsius’s liabilities exceed the company’s assets by $2.85 billion.
In August, the U.S. Trustee’s Office spoke of “numerous concerns” about the firm’s leadership. Earlier, the Financial Times reported the platform’s CEO Alex Mashinsky’s involvement in executing a trading strategy that cost “millions of dollars”.
In September Mashinsky outlined a plan to rescue the company from bankruptcy, according to the press.
Earlier Celsius Network filed a request to sell stablecoins.
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