Alex Mashinsky, CEO of Celsius Network, has proposed plans that would help the company recover from its bankruptcy, the New York Times reported Tuesday.
Celsius filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court of the Southern District of New York in July after halting withdrawals and redemptions on its platform due to the recent crypto bear market.
Becoming a Crypto Custodian
According to the report, Mashinsky and Oren Blonstein, another Celsius executive, told employees during a meeting on September 8 that they plan to rebuild the company as a custodian.
A crypto custodian stores and secures digital assets on behalf of investors and charges fees on certain types of transactions.
The executives noted that the project was code-named “Kelvin,” after a unit of temperature.
“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 said.
During the meeting, Mashinsky pointed out some top global brands including Pepsi, who had also gone bankrupt in the past but were able to rebuild.
“Does it make the Pepsi taste less good? Delta filed for bankruptcy. Do you not fly Delta because they filed for bankruptcy? Are we going to be in the dustbin of companies that were great or almost great or great for a while but disappear?” he asked rhetorically.
Mashinsky also revealed that Celsius was working with a legal entity representing the firm’s creditors, dubbed the Committee of Unsecured Creditors (U.C.C), to come up with a plan to continue operations.
Celsius’s Creditors Express Concerns
After the meeting, the company’s creditors expressed concerns over Mashinsky’s continued involvement in Celsius and the “feasibility” of the Kelvin proposal, the report stated.
It is worth noting that Mashinsky’s proposed plan to rebuild Celsius as a custodian would require approval from the federal bankruptcy judge in New York, Martin Glenn, who is in charge of the company’s bankruptcy proceedings before it could be considered.
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