C's top investor BnkToTheFuture and co-founder Simon Dixon have offered to support the network by implementing the same "financial innovation" used in 2016 to save cryptocurrency exchange Bitfinex from liquidation.
Despite the statement from Dixon on Saturday, June 18, which did not include specific details of the recovery plan offered to Celsius' board and CEO Alex Mashinsky, Dixon noted that it would be similar to the plan offered to Bitfinex after the August 2016 hack, which he claimed was resolved within nine months.
"I believe that traditional finance will not have a timely solution for Celsius as we have seen in the past with Mt. Gox that 10 years later remains unresolved. I believe this can only be solved by a solution that uses financial innovation through the way Bitfinex has solved it in just 9 months."
Dixon noted that as a shareholder and lender of Celsius, and due to the "short-term systemic impact on Bitcoin holders," he "Mbend supports Celsius with a recovery plan."
"My position is to come up with solutions because we have the experience, the license and the technology to do it," he said.
BnkToTheFuture is a global online investment platform that allows investors to invest in Financial Technology companies, funds and other new alternative financial products.The platform touts a network of more than 85,000 qualified investors.In June 2020, Celsius launched a share offering with an investment platform, raising $20.46 million through 1039 investors.
Bitfinex Solutions
Dixon's plans for Celsius were inspired by his company's solutions in August 2016, after Bitfinex announced it had lost about 120,000 Bitcoins (BTC) in a cybersecurity breach, which cost about $72 million in customer money at the time.
Instead of following the liquidation procedure, Bitfinex came up with an innovative recovery plan, which included a "promise to refund" in the form of BFX tokens to customers, representing the value of the money lost in the hack.
These tokens can trade on the open market or can be retained later for future refunds of $1 per token and allow customers to speculate about the company's recovery effectively.
At the end of the month, BnkToTheFuture added to the solution by partnering with Bitfinex to allow customers to convert their BFX tokens into equity within the company.
About 7 months later, BnkToTheFuture reported that the plan worked, with victims recovering between 75% and 100% of their funds through various measures available to them.
"In 2016, Bitfinex needed a plan to recover from their hack and the company I co-founded, BnkToTheFuture.com, supported them and made a recovery involving security tokens, debt and equity and gave investors very high returns. They took the risk. ”
Dixon did not confirm whether his recovery plan would work in the same way as the token, only that it would be resolved using similar innovative methods.
Create a semi-non-GameStop phenomenon
However, there is also an unofficial community-led restoration plan that seems to be gaining traction on Twitter with the hashtag #CELShortSqueeze.
The movement is trying to force Celsius token short sellers to cover up their short positions by deliberately raising the price of CEL tokens through the mass purchase and withdrawal of CEL tokens from various exchanges.
Short selling is an investment strategy in which an investor borrows shares and sells them immediately, with the aim of then buying them back at a lower price and pocketing the difference. It allows an investor to profit from the decline of the stock or asset.
Short selling occurs when short-selling assets increase in value, which forces short sellers to buy back the stock they originally sold to keep their losses from rising. However, buying back stocks when prices are rising can cause further price volatility, which can close the positions of short sellers.
The same strategy was initiated by subreddit r/wallstreetbets users in January 2021, which saw the U.S. video game retailer's stock hit a high of nearly $500 per share, about 25 times the valuation at the start of the month.
Celsius dominated the headlines earlier this month after the popular cryptocurrency lender halted withdrawals due to "harsh market conditions."
On June 20, Celsius issued a statement to the Celsius community, noting that its goal is to continue to stabilize its liquidity and operations.
"It's been a week since we stopped withdrawing money, swapping and transferring. We want our community to know that our goal is to continue to stabilize our liquidity and operations. This process will take time. "
The platform said it aims to maintain an open dialogue with regulators as well as officials and will continue to find solutions. Meanwhile, the platform will pause Twitter Spaces and Ask-Me-Anythings (AMAs).
CEL (CEL) was priced at $0.636 at the time of writing, down 92% from an all-time high.
>> See also: Dogecoin soars precariously in the face of volatile cryptocurrency market conditions.
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