- Celsius’ plans to rebrand itself may be dead in the water
- The company mooted the suggestion of relaunching as a crypto custodian
- Creditors have rejected the idea, clearly showing how little trust they have in the management of the outfit
Plans to revive Celsius, the lending platform that is going through bankruptcy proceedings after collapsing earlier this year, have taken a knock after creditors refused to back them.
Executives for the lending platform, which halted customer withdrawals back in June, formally presented creditor representatives with a plan for reviving business operations, but this has been rebuffed. The news follows a leaked recording of a September 8 meeting obtained and posted by a Celsius investor in the New York Times discussing the potential to resurrect the company.
Celsius Plans to Rise From the Ashes
Celsius has been one of the posterchildren of the crypto crash, with its business practices, and those of the CEO Alex Mashinksy, firmly under the spotlight. The company abruptly halted customer withdrawals three months ago before admitting it was out of cash and filing for bankruptcy the following month.
However, at a meeting with employees last week, Mashinsky outlined a plan to revive the firm alongside Oren Blonstein, another Celsius executive, with a focus on cryptocurrency custody. The meeting, which was recorded by an attendee and leaked to the New York Times, saw Mashinksy questioned stiffly by employees, with the CEO comparing the rebuilding process to famous corporate turnarounds, such as Pepsi’s bankruptcies in 1923 and 1931.
Creditors Unmoved by New Plan
Celsius’s leadership formally made the proposal to the bankruptcy judge this week , but it seems as if its plans are dead in the water already, with representatives of the creditors, known collectively as the Committee of Unsecured Creditors (UCC), flatly refusing to entertain the idea.
Gregory Pesce, a lawyer for the committee, gave the suggestion of a relaunch short shrift, saying that the creditors would not support such a move:
The debtors, as has been widely reported, met with the UCC. They presented a concept. UCC does not support that concept. We don’t support any end game here.
Such a reaction isn’t surprising given the way that Mashinsky and co lied about the health of the company, even when they knew it was failing. Reports emerged recently that Celsius may even have been insolvent since as far back as 2019, so it’s no surprise that creditors simply want their money back and to get out.