Communication lending Celsius is considering issuing a new token to serve its plan to compensate its creditors.
Within the framework of company restructuring, Celsius proposed to launch a new token, helping to raise capital to soon compensate users and creditors, according to an announcement dated January 24.
BREAKING NEWSJanuary 24, 2023
- #CelsiusNetwork is looking at having a stratefied recovery smaller holders bellow 5k might get all assets to leave.
- Larger holders will get a debt token that seems to represent all the value, so you can sell if you dont believe in the company or recovery.
During a trial, Celsius attorney Ross M. Kwasteniet said the organization could be restructured into a public company and debt repayment with new token. Thereby, preserving assets for creditors, instead of liquidating the old "remnants".
On the other hand, some creditors suggested Celsius follow in Bitfinex's footsteps. This company once issued UNUS SED LEO tokens (referred to as LEO), to "compensate" for the $ 850 million, which was dropped by Bitfinex and nearly fell into insolvency in 2019. Bitfinex when He commits to buy back tokens to compensate users.
CoinFLEX, the company that blocked withdrawals after Celsius collapsed, did the same, issuing rvUSD token based on whale debt in summer 2022. New token pegged to USD yields 20% /year for holder.
But it will need to wait for the approval of a federal judge for Celsius's plan. Furthermore, any restructuring plan must go through a creditor vote.
Detailed report from CoinDesk shows, Celsius named the new token Asset Share Token (AST), for creditors over $5,000.
Accordingly, the creditor has full discretion whether to sell tokens for immediate profit or hold them to receive annual interest. The remaining retail investors will receive partial compensation equal to cryptocurrency standard.
Celsius's native token CEL is still in circulation but cannot be used as a bonus token as intended because the company has suspended its services. CEL has dropped by 77% over the past year.
As you know, Celsius has stopped depositing and withdrawing from June 2022. Followed by a series of negative days for the platform until July 14, Celsius officially filed for Chapter 11 bankruptcy. At that time, Celsius admitted to losing $1.2 billion and was a creditor of the company. 3AC – the platform is in a similar situation. By the beginning of this year, the big man lending This company claims to have control of $4.2 billion in customer assets and is currently in a "trivial" dispute with Fabric Ventures.