According to Celsius, a crypto lender Celsius, it will take time to stabilize its liquidity. Investor BnkToTheFuture suggested a recovery plan. The Celsius crypto lender has updated its position, saying that it “continues to be stabilizing liquidity and operations.”
The New Jersey-based company stated that “This process will be slow,” in a blog posted Sunday night.
Celsius stated that the company is in “an open dialog with regulators and officials” to find a solution.
The company also stated that it will be suspending its Reddit Ask Me Anything sessions (AMA) and Twitter Spaces (RSP) to “focus on navigating these unprecedented problems and fulfilling our responsibilities to the community.”
Celsius has abruptly cancelled its Reddit AMA session scheduled for Friday. CEO Alex Mashinsky appeared in a short on the company’s YouTube channel with a similar message.
Celsius made a shocking move last Sunday that shocked the crypto industry. They stopped withdrawals, swaps, and transfers between accounts due to “extreme market conditions.”
This decision was a major factor in the market’s decline, with the Bitcoin price dropping to below $18,000 during the weekend.
As of the writing, BTC has risen 4.4% in the last day, but is still trading above $20,000 per CoinMarketCap.
BnkToTheFuture, Celsius’s lead investor, has offered to help the firm by using “financial innovations” similar to those used to save Bitfinex.
BnkToTheFuture allows investors to invest online in funds, financial technology companies and other alternative products. Celsius launched an Equity Offering with BnkToTheFuture in June 2020. It raised $20.46 million from more than 1000 investors.
“I think traditional finance will not be able to provide a timely solution for Celsius, as we saw with Mt. “Gox that remains unresolved ten years later,” Simon Dixon, CEO of BnkToTheFuture, wrote in a post.
Bitfinex switched to UNUS SEED token (LEO) May 2019 in order to raise $1B. The newly-minted token was sold in exchange for Tether (USDT), to replace the $850 million exchange that was lost to Crypto Capital, a Panama-based bank.
Dixon stated that the matter was resolved in 9 months, which worked out well for depositors.
Dixon stated that he would not reveal details about the recovery plan suggested by Alex and the Celsius board, but added that it was his position to offer solutions “as we have the experience and licenses to do so.”
Dixon wrote that “Our industry has come back stronger after every disaster” and now it is time to support them in a bottom-up way in conforming with the regulations they have always followed.
Dixon’s offer comes on the heels reports that CDPQ (Caisse de depot et placement du Quebec), a Canadian pension fund, and WestCap Group (New York-based) are unlikely to help the crypto lender.