Crypto lending platform Celsius, currently in the middle of bankruptcy proceedings, reportedly plans to rebuild around crypto custody services.
According to a Tuesday report from the New York Times, Celsius CEO Alex Mashinsky and head of innovation and chief compliance officer Oren Blonstein aimed to revive the company using a project named Kelvin, storing users’ crypto and charging fees on certain transactions. Mashinsky reportedly made the announcement at a Sept. 8 meeting for employees, at which the company discussed possible scenarios for its future after filing for Chapter 11 bankruptcy in July.
A legal entity representing Celsius’ creditors, called the Committee of Unsecured Creditors, reportedly requested the firm continue offering services including loans, staking and custody. Mashinsky compared the platform’s possible comeback to those of Apple and Delta Airlines — the companies came close to bankruptcy in 1997 and filed for Chapter 11 in 2005, respectively.
Under its current business model, Celsius said it did not charge any fees for transactions, withdrawals, origination or early termination. The report cited a person with knowledge of the matter who said the committee expressed concerns about Mashinsky’s involvement with Celsius and the proposed Kelvin project.
“If the foundation of our business is custody, and our customers are electing to do things like stake somewhere or swap one asset for the other, or take a loan against an asset as collateral, we should have the ability to charge a commission,” Blonstein reportedly said to Celsius employees.
Regulators have leveled allegations against Celsius amid bankruptcy proceedings in court. On Sept. 7, Vermont’s Department of Financial Regulation claimed both the lending platform and Mashinsky misled state regulators about the firm’s financial health and its compliance with securities laws. Users have also sought legal remedies to access more than $22.5 million in funds, which have been in Celsius’ custody since freezing withdrawals in June.