Latest news about Bitcoin and all cryptocurrencies. Your daily crypto news habit.
Bankrupt crypto lender Celsius could soon restructure and issue a cryptocurrency token to compensate users, according to a report from Bloomberg on Jan. 24.
During a court hearing, Celsius attorney Ross M. Kwasteniet said the company could be reorganized into a publicly-traded company with proper licensing. That approach could serve as an alternative to selling the company’s crypto assets — and could be more profitable for creditors given the currently poor crypto market conditions.
Celsius is also working to issue a new cryptocurrency token to compensate the company’s creditors, Kwasteniet said.
Certain creditors are reportedly asking Celsius to follow the lead of Bitfinex, which issued the UNUS SED LEO token in 2019 after losing access to a portion of its funds. Bitfinex committed to a buyback of the token to compensate users.
CoinFLEX, which went bankrupt shortly after Celsius’ own collapse, similarly issued a recovery token (rvUSD) last summer. That token was tied to the value of the U.S. dollar and offered 20% annual returns to users willing to hold the asset.
Celsius would need approval from a federal judge to issue a token. Furthermore, any restructuring plan would face a creditor vote.
More detailed reports from CoinDesk suggest that Celsius’ would name its new token the Asset Share Token (AST). The token would be issued to high-value creditors. Those creditors could then sell the tokens for immediate profit or hold the tokens to receive interest. Celsius’ remaining smaller investors, who make up about two-thirds of its base, would receive partial compensation in standard cryptocurrencies instead.
Celsius’ original token, CEL, is still in circulation but cannot be used as a reward token as intended because the company has halted its services. CEL’s value is down 77% over the past year. Bitcoin, by contrast, is down just 37% over one year.
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.