Celsius Network seeks to sell stablecoins in effort to charts future, expecting customers to forget its past

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Celsius Network charts future expecting customers to forget its past

Illustration: Shoshana Gordon/Axios Celsius Network is charting its future while mired in a bankruptcy proceeding that just got more interesting. Eager to resume business operations, the crypto lender is now asking the court for permission to sell its stash of stablecoins to fund operations, according to a submitted Thursday. Why it matters: The company has yet to settle up with customers whose assets have been frozen on the platform since June. Yet it appears to be targeting a fresh crop of crypto newbies.It to resume doing business, even though it's in the thick of bankruptcy proceedings and under investigation by at least state securities regulators about potential unregistered securities activity, mismanagement, securities fraud and market manipulation. Details: Celsius currently owns 11 different stablecoins totaling approximately $23 million. The intrigue: The company believes it has a plan.The New Jersey-based crypto lender is reinventing itself as a digital-asset custodian, according to a of a Sept. 8 company meeting. The project code named "Kelvin" was first reported by the .Custody is the business of holding customers' digital assets for them and being on the hook for securing their private keys — as opposed to investors storing them in their own cold wallets far from the internet.What he's saying: "Imagine, again, that if everyone had to manage their own keys," CEO Alex Mashinsky is heard saying in the recording. "It’s just not a sustainable proposition. So we’re gonna reopen the things that we do best, again: custody, staking, loans, right?" Quick take: Mashinsky is betting that wallet management is so complicated that a company like Celsius — in spite of how it treated customers in the face of insolvency — will continue to have an addressable market. What others are saying: David Schwartz, CTO of Ripple, the company behind XRP, tweeted his response to the news of Celsius' planned transformation: a picture of a with the crypto lender's logo emblazoned on it. State of play: The judge overseeing Celsius' bankruptcy on Wednesday the appointment of an independent examiner, also giving the nod to the narrowed scope of the investigation. Per a plan proposed by Celsius, and agreed upon by the U.S. Trustee's office — a Department of Justice entity that monitors bankruptcies — the independent examiner will review the company's current crypto holdings, determine whether they were commingled and look into transferring customer assets to different account types starting in April 2022, among other things.Meanwhile, the Federal Trade Commission to be included in proceedings. The regulator has previously joined proceedings that involve consumer information. What's we're watching: The Oct. 7 hearing, during which Celsius hopes to "advance discussions regarding the reopening of withdrawals" for certain account holders.

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