Celsius Plans To Revive The Company With A Focus On Custody
Celsius’s CEO is planning to revive the company after the crypto crash. According to the plan, the company will focus on custody after returning to operation. This plan is receiving negative reactions from the community.
In a meeting on September 8, CEO Alex Mashinsky spoke with Celsius Network staff members. According to a recording of the meeting provided to the New York Times, he laid forth a strategy for the firm’s rebirth. In the meeting, he and Oren Blonstein, another Celsius executive, said they hoped to rebuild the company with a focus on custody – storing people’s cryptocurrencies for them, and then charging fees on certain types of transactions.
According to the recording, the upcoming project has the code name “Kelvin”, after the unit of temperature. It isn’t known why Blonstein and Mashinsky chose this name.
Under the new plan, the lender would pivot to storing customers’ crypto in a special wallet and levying different charges for various transactions.
Facing employee skepticism, Mashinsky rhetorically asked the employees whether two companies that filed for bankruptcy, PepsiCo and Delta, prevented people from buying Pepsi or flying on Delta airlines.
“Does it make the Pepsi taste less good? Do you not fly Delta because they filed for bankruptcy?”Mashinsky quipped
The new plan has drawn criticism on crypto Twitter.
Another Twitter user, @ross_stalker, questioned the incentive to deposit funds into Celsius versus depositing the funds into a regular bank. Why would he pay a fee to hold crypto in a new type of secure crypto wallet described by the Celsius executives when he could keep money in a bank without being charged?
Celsius filed for bankruptcy protection in July 2022. This was roughly a month after pausing all withdrawals as the crypto market downturn. Celsius Network owed as much as $4 billion to its users at the time of its bankruptcy.
Celsius is awaiting the outcome of a bankruptcy hearing scheduled for October 6, 2022, where a ruling will be made on whether customers will be allowed to withdraw their crypto from the company’s “custody program” and “withhold accounts.”
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