According to a report that was published on the 24th of January by Bloomberg, the defunct cryptocurrency lending platform Celsius may soon restructure and issue a cryptocurrency token to compensate users.
An attorney for Celsius named Ross M. Kwasteniet said in front of a judge that his client’s business might be reformed into a publicly listed corporation if the appropriate license was obtained. This strategy might be used as an alternative to selling the crypto assets held by the firm, and given the present state of the cryptocurrency market, it could prove to be more advantageous for the company’s creditors.
According to Kwasteniet, Celsius is also working on the process of issuing a new cryptocurrency token in order to compensate the company’s creditors.
According to recent reports, a number of Celsius’ creditors are requesting that the company follow the example set by Bitfinex, which, in 2019, created the UNUS SED LEO coin after losing access to a part of its cash. Bitfinex has indicated that it will buy back the token in order to compensate its customers.
CoinFLEX, another cryptocurrency exchange that failed not long after Celsius, did the same thing and released a recovery token (rvUSD) in the summer of 2017. Users who were willing to hold the asset were offered annual returns of 20% on the token’s value, which was pegged to the value of the United States dollar.
In order to issue a token, Celsius would need authorization from a federal court. In addition, any proposed reorganization would be subject to a vote by the creditors.
According to other in-depth reporting from CoinDesk, Celsius could call its new coin the Asset Share Token (AST). Only high-value creditors would be eligible to receive the token. The creditors could either choose to keep the tokens in order to accrue interest on them or to sell them in order to realize an immediate profit. The remaining smaller investors in Celsius, who together make up around two-thirds of the platform’s base, would get some recompense in the form of regular cryptocurrencies rather than cash.
The original CEL token that was issued by Celsius is still in circulation, but it cannot be redeemed for rewards as it was designed to do since the firm that issued it has stopped providing those services. The value of CEL has decreased by 77% during the course of the last year. Bitcoin, on the other hand, has only lost 37% of its value over the last year.