A restoration plan for Celsius submitted amid a brief squeeze experiment under the control of the community

A restoration plan for Celsius submitted amid a brief squeeze experiment under the control of the community – Mail Bonus

Celsius’s main investor, BnkToTheFuture, and co-founder Simon Dixon have offered to help the network by applying a similar “financial innovation” used in 2016 to save Bitfinex’s cryptocurrency from bankruptcy.

Although Dixon’s statement on Saturday, June 18, did not provide specific information about the recovery plan offered by the Celsius board and CEO Alex Mashinsky, Dixon noted that it was similar to what Bitfinex offered after its hack in August 2016, which he said had been resolved within nine months.

“I believe that traditional finance will not have a timely solution for Celsius, as we saw in the past with Mount Gox, which is still unresolved 10 years later. I believe this can only be solved with a solution that uses financial innovation as we did with Bitfinex which was solved within 9 months and worked very well for depositors.

Dixon noted that as a shareholder and lender of Celsius, and because of the “short-term systemic impact on Bitcoin holders”, he was “interested in supporting Celsius with a recovery plan”.

“It is my position to offer solutions where we have the experience, licenses and technology to do so,” he said.

BnkToTheFuture is an international online investment platform that enables investors to invest in financial technology companies, funds and other new financial products. The platform offers a network of over 85,000 qualified investors. In June 2020, Celsius launched a share offering with the investment platform, raising $ 20.46 million through 1,039 investors.

The Bitfinex solution

Dixon’s plans for Celsius draw inspiration from the company’s solutions in August 2016, after Bitfinex announced that it had lost approximately 120,000 Bitcoin (BTC) in cyber security breaches, resulting in a loss of about $ 72 million of customers’ money at the time.

Rather than go bankrupt, Bitfinex came up with an innovative recovery plan, which included a “promise to repay” in the form of BFX tokens to customers, representing the value of the money lost in the hack.

These tokens were traded on the open market or could be stored later to repay $ 1 per token in the future and actually allow customers to speculate on the recovery of the company.

Later this month, BnkToTheFuture added the solution by working with Bitfinex to allow customers to convert their BFX tokens into shares in the company.

About seven months later, BnkToTheFuture announced that the program had worked, with victims recovering between 75% and 100% of their funds through the various measures available to them.

“In 2016, Bitfinex needed a plan to recover, and the company I founded, BnkToTheFuture.com, supported them and implemented a recovery that included security tokens, debt and equity, giving investors very high returns for the high. the risk they took. ”

Dixon did not confirm whether his recovery plan would work in the same way with a symbol, only that it would be solved with similar innovative methods.

Gamestop-style short-squeeze brewing

However, there is also an unofficial community-led recovery plan that seems to be gaining traction on Twitter under the hashtag #CELShortSqueeze.

The movement is trying to force the sellers of the Celsius symbol to cover their short positions by systematically raising the price of the CEL symbol through mass purchases and withdrawals of the CEL symbol from various stock exchanges.

Short selling is an investment policy where the investor borrows shares and sells them immediately, with the aim of buying them back later at a lower price and putting the difference in his own pocket. It allows an investor to profit from a decline in stocks or assets.

Short-circuiting occurs when short-term assets rise in price instead, forcing short-sellers to buy back the shares they originally sold to prevent their losses from increasing. However, buying back shares when prices are rising can lead to a further rise in prices, which can then further squeeze short sellers out.

Connected: Crypto Biz: Crypto massacre pushes Celsius, Three Arrows Capital goes bankrupt, June 9-16

The same trend was set by users of subreddit r / wallstreetbets in January 2021, with US video game stocks reaching a high of nearly $ 500 a share, about 25 times the value at the beginning of the month.

Celsius dominated the headlines earlier this month after the popular cryptocurrency lender suspended “extremist market” reviews.

The suspension of withdrawals has closed customers’ money, as many fear that funds that are closed on the platform will never see the light of day again, if the platform goes to their stomachs.

On June 20, Celsius issued a statement to the Celsius community stating that its goal continues to be to stabilize its liquidity and operations.

“It’s been a week since we took a break from withdrawals, exchanges and transfers. We want our community to know that our goal is to continue to stabilize our liquidity and operations. This process will take time. “

The forum said it aims to hold open talks with regulators and officials and will continue to find a solution. At the same time, the platform will pause Twitter Spaces and Ask-Me-Anythings (AMAs).

Celsius (CEL) is priced at $ 0.636 at the time of writing, down 92% from its all-time high.