Celsius Wants to Sell $23M in Stablecoins to Keep the Dream Alive
Celsius currently holds 11 types of stablecoins worth $23 million, much needed fuel for its ‘absolute zero trust’ revival plan
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key takeaways
- A hearing on the motion is scheduled for Oct. 6 in New York
- Celsius reported having $2.8 billion debt in August
Bankrupt lender Celsius raised eyebrows after recently revealing a revival project to win back customers, and it’s willing to dump its stablecoins to get there.
The firm has asked the court for permission to offload its stablecoin holdings in order to fund operations, a filing from Thursday shows.
Celsius lawyer Joshua Sussberg, who described the firm as “one of the largest and most sophisticated cryptocurrency based finance platforms in the world,” wrote the lender currently owns 11 different types of stablecoins worth $23 million, but didn’t mention which they were.
When Celsius was solvent, it used stablecoins in its retail and institutional lending services, he said.
Celsius has provided varying figures of its liabilities and assets after drowning in liquidity trouble and filing for bankruptcy in mid-July. A declaration made by CEO Alex Mashinsky shortly after initiation of bankruptcy showed it had a $1.2 billion hole in its balance sheet, with $5.5 billion in liabilities. But a month later, it reported having $2.8 billion in debt.
The firm agreed it wouldn’t liquidate or sell its cryptocurrency holdings without the consent of the court. While it disclosed holding $761 million in its own CEL token in August, it hasn’t previously reported its stablecoin holdings.
“The Debtors [Celsius], however, continue to own stablecoins that should be monetized to fund their operations in these chapter 11 cases given their market stability compared to other types of cryptocurrencies,” Sussberg said.
A hearing on the matter is scheduled for Oct. 6.
Celsius stablecoins could help ‘absolute zero trust plan’
During an all-hands meeting last week, Mashinsky outlined a bold comeback project for the firm called “Kelvin.”
The term is a reference to a unit of temperature which takes absolute zero (-273 degrees Celsius) as its lower bound. Top brass are describing the project as one with “absolute zero trust involved.”
The plan includes re-enabling some key services and would allow customers that have funds in custody to stake, swap and take loans for a fee.
Mashinsky suggested just because companies become bankrupt, that doesn’t necessarily imply permanent doom.
“Pepsi filed for bankruptcy twice, right? Does it make the Pepsi taste less good?” he said. “Delta filed for bankruptcy, right? Do you not fly Delta because they filed for bankruptcy?”
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