Celsius Recovery Plan Similar To Bitfinex Solution After Bitcoin Hack 2016

BnkToTheFuture co-founder Simon Dixon has proposed a Celsius recovery plan similar to the one offered to Bitfinex after the Bitcoin hack in August 2016 – allowing customers to be compensated for their losses through tokens tied to the recovery of the platform.

Celsius’s Recovery Effort

Leading Celsius investor BnkToTheFuture and co-founder Simon Dixon have offered to support the network by implementing the same “financial innovation” used in 2016 to save the Bitfinex crypto exchange from liquidated.

Although the statement from Dixon on Saturday, June 18, did not include specific details of a recovery plan provided to Celsius’ board and CEO Alex Mashinsky, Dixon noted that it would be similar to the one offered to Bitfinex after the August 2016 hack, which he claims was resolved within nine months.

Dixon noted that as a shareholder and lender of Celsius, and given the “short-term systemic impact on Bitcoin holders,” he “wants to support Celsius with a recovery plan, “

“My position is to deliver solutions because we have the experience, the license and the technology to do it,” he said.

BnkToTheFuture is a global online investment platform that allows investors to invest in fintech companies, funds and other new alternative financial products. The platform touts a network of over 85,000 qualified investors. In June 2020, Celsius launched an equity offering with its investment platform, raising $20.46 million through 1039 investors.

Bitfinex Solutions

Dixon’s plans for Celsius were inspired by his company’s solutions in August 2016, after Bitfinex announced it had lost approximately 120,000 Bitcoin (BTC) in a cybersecurity breach, causing the loss of approximately 120,000 Bitcoins (BTC) $72 million in customer funds at the time.

Instead of pursuing a liquidation procedure, Bitfinex has come up with an innovative recovery plan that includes a “promise of return” in the form of BFX tokens to customers, representing the value of lost funds in the hack.

These tokens are tradable on the open market, or can be held later for a future return of $1 per token and allow customers to speculate on the company’s recovery one day at a time effectively.

Later in the month, BnkToTheFuture added to the solution by partnering with Bitfinex to allow customers to convert their BFX tokens into equity in the company.

About seven months later, BnkToTheFuture reported that the scheme was working, with victims recovering between 75% and 100% of their funds through various means available to them.

Dixon did not confirm whether its recovery plan will work in a similar way to the token, only knowing that it will be resolved using similar innovative methods.

Celsius caused extreme panic among the crypto community earlier this month after the popular crypto lender halted withdrawals due to “extreme market conditions.”

The withdrawal stop has left customers without their funds, with many concerned that funds locked on the platform may never see the light of day, should the platform go up.

On June 20, Celsius released a statement to the Celsius community, noting that their goal is to continue to stabilize its liquidity and operations.

“It has been a week since we paused withdrawals, Swaps and transfers. We want our community to know that our goal is to continue to stabilize our liquidity and operations. This process will take time.”

The foundation said it aims to maintain an open dialogue with regulators and officials and will continue to find solutions. Meanwhile, the platform will pause Twitter Spaces and Ask-Me-Anythings (AMAs).

CEL (CEL) is priced at $0.636 at press time, down 92% from its all-time high.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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