Bankrupt Crypto Broker Celsius Has a New Plan Codenamed ‘Kelvin’


A gold bitcoin partially trapped in a block of ice, all tinted blue.

The ongoing crypto winter has created quite a few puns on “cold cryptocurrencies”, but until now we had not come across any company that said they wanted to reach “absolute zero”.
Image: mike_o (Shutterstock)

Kelvin, as a temperature scale, uses “absolute zero” as a reference. That conceived lower temperature would effectively stop all particle activity due to the lack of any semblance of energy. That temperature point has never been reached, but failed crypto firm Celsius seems to want to get as close to “absolute zero” as possible during this ongoing crypto winter.

the New York Times It first reported Tuesday based on a recorded internal meeting that “Kelvin” is what bankrupt crypto lending firm Celsius wants to call its company back. In that recorded closed-door meeting held on September 8, company executives briefed employees on a plan that would rebuild their company into a kind of crypto custody company.

The recording was initially sent to the Times by Tiffany Fong, a client of Celsius and crypto youtuber. Fong wrote that she received the recording from an anonymous source via encrypted message, but included a full transcript of the meeting on their website. Via Twitter messages, Fong told Gizmodo that he was reserving his opinion of the meeting until a later date.

The meeting was led by CEO Alex Mashinsky and Oren Blonstein, the company’s chief innovation officer. His reopening plans would essentially turn the company into a crypto custody firm, acting as a sort of bank for crypto users. crypto, while charging fees on transactions.

“We gave it a code name: Kelvin, absolute zero,” Mashinsky told the assembled employees. “So we’re basically planning to reopen with a process that doesn’t require you to trust us with anything.”

Celsius did not immediately respond to Gizmodo’s request for comment. The company did not dispute the veracity of the meeting transcript in a statement to the Times, and a spokesperson told the newspaper that they often hold internal preparatory meetings for multiple scenarios.

The company is trying to paint its current pains as just a moment of tragedy that will inevitably be outgrown. At the meeting, Blonstein related his own experience to the archetypal story structure of the “Hero’s Journey,” or the monomythsaying that while they first find success, they inevitably stumble “and have this dark time”.

Breaking out of that “supreme test” point of the Monomyth cycle is about regaining customer trust, according to Blonstein.

“The core concept of escrow is that this is your property and we hold it in your name and that is what we are going to offer,” he said. “That principle that this is their property that we’re holding on their behalf means they’re going to get it back.”

But as much as Celsius wants to get out of the impasse of bankruptcy and crushing morale layoffswill still have to deal with the investigations of Financial regulatory agencies of 40 separate states About the company stop withdrawals back in June. The company was in debt billions of dollars to its users after it closed the doors on the accounts. Celsius once offered extravagant interest rates of up to 18% and bragged about its more than 1 million customers.

Even though your company is being investigated by regulators and is being scream by previous partners, Mashinsky allegedly compared himself to brands like Delta Airlines and Pepsi, both of which went bankrupt at one point in their lifespan.

“Now we have an opportunity to reorganize ourselves,” the CEO told the assembled employees. “Pepsi went bankrupt twice, right? Does it make Pepsi taste less good? Delta filed for bankruptcy, right? Aren’t you flying Delta because it filed for bankruptcy? So the point is that a bankruptcy filing is a test for the business, it’s a test of: should it go out or should it go away?

Employees appear skeptical, according to the recording transcript. An employee asked why they were going this way when their previous business was focused on telling customers there were no transaction fees. Mashinsky responded that they were always planning to institute transaction fees, but just never got the chance.

Another employee reportedly asked, “How are you going to win back our trust as employees who saw their friends, sometimes even family members, get kicked out because of the mistakes they made?” After a lengthy talk about the current failures of cryptocurrencies to solve even the basic issues of crypto wallet key management, Mashinsky said: “we are going to reopen the things we do best, again: escrow, staking, [and] loans.”

Still, even this new idea for a company revival is not going to happen all at once. Mashinsky said “everyone should be ready for a long winter,” but that they are in a safe place with their Chapter 11 bankruptcy filing. The company has promised it is working on ways to reimburse “tens of thousands of Celsius customers.” Celsius’s CEO said part of his reopening plan is to “return the rest of the coins,” though that will depend on consensus among shareholders.


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