Crypto lending platform Celsius, currently in the midst of bankruptcy proceedings, reportedly intends to rebuild around crypto custodial services.
According to a report in the New York Times on Tuesday, Celsius CEO Alex Mashinsky and chief innovation and compliance officer Oren Blonstein aimed to revive the company using a project named Kelvin – storing the crypto from users and charging fees on certain transactions. Mashinsky reportedly made the announcement during a Sept. 8 meeting for employees, where the company discussed possible scenarios for its future after filing for Chapter 11 bankruptcy in July.
A legal entity representing Celsius’ creditors, called the Committee of Unsecured Creditors, reportedly asked the company to continue offering services such as lending, staking and custody. Maskinsky compared the platform’s possible comeback to those of Apple and Delta Airlines – the companies near bankruptcy in 1997 and filed for Chapter 11 in 2005, respectively.
Under its current business model, Celsius said it charges no fees for transactions, withdrawals, origination or early termination. The report quotes a person with knowledge of the matter who said the committee had raised concerns about Mashinsky’s involvement with Celsius and Kelvin’s proposed project.
“If the foundation of our business is custodial and our customers choose to do things like stake somewhere or exchange one asset for another, or take out a loan against an asset as collateral, we should have the option to charge a commission,” Blonstein reportedly told Celsius employees.
Related: Celsius bankruptcy proceedings show complexities amid fading recovery hopes
Regulators made the Celsius claims amid bankruptcy proceedings in court. On September 7, the Vermont Department of Financial Regulation claimed that the lending platform and Mashinsky had misled state regulators about the company’s financial health and its compliance with securities laws. Users have also demanded legal remedies to access more than $22.5 million in funds that have been in Celsius’ custody since the withdrawal freeze in June.