Embattled crypto lender Celsius delivered an update on its situation, stating that its "objective continues to be stabilizing our liquidity and operations."
“This process will take time,” the New Jersey-based company said in a blog post on Sunday night.
Celsius stated that it is maintaining “an open dialogue with regulators and officials” and is seeking to “find a resolution.”
The company added that it is also pausing its Twitter Spaces and Reddit Ask Me Anything (AMA) sessions “to focus on navigating these unprecedented challenges and seeking to fulfill our responsibilities to our community.”
Celsius abruptly canceled its scheduled Reddit AMA session last Friday, with CEO Alex Mashinsky appearing in a short video on the company’s YouTube channel with a similar message.
In a move that sent shockwaves across the crypto industry, Celsius froze withdrawals, swaps and transfers between accounts last Sunday, citing “extreme market conditions.”
The decision played a significant part in the decline of the broader market, with the below $18,000 over the weekend.tanking
Recovery plan for Celsius
Celsius’ lead investor BnkToTheFuture has meanwhile offered to assist the firm by deploying “financial innovation” similar to that used to save crypto exchange Bitfinex.
BnkToTheFuture is a global online investment platform that allows investors to invest in financial technology companies, funds and other new alternative financial products. In June 2020, Celsius launched an equity offering with BnkToTheFuture, raising $20.46 million through more than 1,000 investors.
“I believe traditional finance will not have a timely solution for Celsius as we saw in the past with Mt. Gox that still remains unresolved 10 years later,” BnkToTheFuture CEO Simon Dixon wrote in a blog post.
I believe traditional finance will not have a timely solution for Celsius as we saw in the past with Mt. Gox that still remains unresolved 10 years later. I believe that this can only be solved with a solution using financial innovation https://t.co/FyF1Qaw6ZE
— Simon Dixon (Beware Impersonators) (@SimonDixonTwitt) June 19, 2022
Bitfinex turned to UNUS SED LEO token (LEO) in May 2019 to raise $1 billion, selling the freshly-minted token in exchange for (USDT) to replace $850 million the exchange lost to the Panama-based bank Crypto Capital.
According to Dixon, “that was resolved within 9 months and worked out very well for depositors.”
Dixon said he wouldn’t disclose specific details of the suggested recovery plan “before Alex and the Celsius board are ready,” adding that “it’s my position to offer solutions as we have the experience, licenses and technology to do so.”
“Our industry has come back stronger from every disaster and now is the time for us to offer support in a bottom up way in compliance with the regulations we have always followed,” wrote Dixon.
Dixon’s offer came hot on the heels of reports that Canadian pension fund CDPQ (Caisse de dépôt et placement du Québec) and New York-based WestCap Group—the companies that led Celsius $750 million Series B funding round last year—are unlikely to come to the rescue of the embattled crypto lender.