- The wrapped tokens will be redeemable by Celsius customers for a particular ratio.
- In July, Celsius sought Chapter 11 bankruptcy protection.
A new record has surfaced of Celsius Co-Founder Nuke Goldstein discussing a plan to use crypto-based solutions to repay Earn customers and restore the company’s fortunes.
Celsius consumer and YouTuber Tiffany Fong revealed a leaked audio clip of an internal meeting that shows Celsius is thinking about another way to pay back customers. Celsius co-founder and Chief Technology Officer Nuke Goldstein says the company represents the ratio between how much we really owe and how much we truly have by wrapping the Bitcoin, Ether, and USDC it owes clients into a token.
Customers of Celsius will be able to redeem the wrapped tokens for a specific ratio. Alternatively, they can keep their Cx tokens on the Celsius platform and wait for a larger payout when revenue from the company’s bitcoin mining operations and other potentially profitable opportunities in the broader crypto market begins to flow in.
Wrapped Tokens Can Also Be Traded on Uniswap
Customers of Celsius would also have the option of trading the wrapped tokens on decentralized exchanges like Uniswap, where market forces would determine their worth. In July, a month after stopping withdrawals due to a liquidity shortfall attributed to extreme market conditions, Celsius sought Chapter 11 bankruptcy protection. The severity of Celsius’ financial difficulties was shown by subsequent bankruptcy proceedings in the Southern District of New York; 500,000 creditors are owed close to $5 billion by the lender.
The strategy similarly resembles Bitfinex’s recovery strategy after a hack that resulted in the loss of 120,000 bitcoins (BTC) from the exchange’s reserves in the middle of 2016. Customers who had been hacked were given debt tokens by the exchange, which were afterward exchanged on the open market often for considerably less than their $1 face value. Bitfinex had acquired all of its remaining debt tokens by April 2017.
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