Celsius’ financial situation has investors worried. While the company filed for bankruptcy last month, it is still struggling to put out the blaze that is spreading at lightning speed. However, even if so far there seemed to be no solution, it could be that the crypto platform has finally found a way out.
Bad weather for Celsius
The bear market has caused many inconveniences to trading platforms. Several of them found themselves in bad shape during the crypto winter. But for some, the fall in prices is not the only reason for their decline. It does indeed appear that Celsius continues to pay for any past management issues.
Indeed, the company’s debts are piling up. However, it is likely that the crypto company has finally found the ideal solution to get back on its feet: the issuance of wrapped tokens. A recent registration from Celsius’ leadership details the company’s executives’ plans for reimbursing their customers. In the latter, published by Tiffany Fong, a public figure and Celsius customer, Nuke Goldstein, gives further details on the Earn Customer Refund Plan.
The idea is to collect the remaining funds of the platform allocated to the reimbursement of customers in wallets. Then issue wrapped tokens called Cx. These will represent the ratio between the amount the company owes and the amount it has. As a result, a client waiting to exchange their bitcoins (BTC) will receive CxBTC tokens.
According to Goldstein, customers can either redeem their wrapped tokens or wait for a larger payout when the additional payouts arrive. He also mentioned inbound crypto mining, income from staked ETH, and other coins that could become liquid.
Nice initiative that may not succeed
After the bankruptcy of Celsius, the crypto platform is putting everything in place to recover and regain the trust of customers. Issuing wrapped tokens is a big step forward. However, the dream could end without having started. Indeed, the crypto company must present any proposal to the court and obtain approval before starting anything.
In July of this year, Celsius entered Chapter 11 proceedings. Since then, the company has gone through the bankruptcy process with customers hoping for their tokens to be returned. In a recording of Alex Mashinsky, the CEO of the company, we can discover the details of his recovery plan named Kelvin.
Even though the creditors’ committee representing the customers declined to comment publicly on the proposal, the judge still decided to appoint an outside reviewer to investigate Celsius’s finances and management.
Issuing wrapped tokens may be an adequate solution to get Celsius out of this mess. In addition, this recovery plan leaves the choice to customers. In the recording, Celsius co-founder and CTO Nuke Goldstein says the longer they wait, the more likely the gap will be closed. However, they can still decide to redeem. And to facilitate the redemption mechanism, the company plans to allow trading on other platforms.
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Celsius (CEL): A recovery plan on the horizon?
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