Celsius Network's Rebranding Plan Sparks Outrage In Crypto Community

Zinger Key Points
  • Amid its bankruptcy hearing, Celsius Network comes up with a rebranding plan.
  • Some in the crypto community have responded, calling the plan a potential scam.

Amid the ongoing bankruptcy proceedings, Celsius Network CEL/USD has announced a plan to rebrand as a publicly traded recovery corporation.

The crypto lender's lawyers stated that if the plan is approved, creditors with assets above an unspecified threshold would receive the Asset Share Token (AST), which would reflect the value of their assets.

The token would give holders the right to earn dividends or sell on the open market.

However, the crypto community has criticized the plan, calling it a potential scam.

Twitter user Crypto_Tolkien, who has been vocal about the issue, claimed that the reorganization is a scam to steal more funds and issue a worthless token instead of the original cryptocurrencies deposited by users.

The threshold for releasing the token has not been set, and ongoing discussions with the Unsecured Creditors Committee (UCC) are taking place.

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Crypto_Tolkien also accused Celsius and the UCC of planning to steal money that was withdrawn 90 days prior to the company's declaration of bankruptcy through "clawbacks."

He stated that the company "will put a lien on your house and garnish your wages."

Celsius has explained that the recovery plan was explored after failing to receive the right bids.

The company stated that the recovery would be partial.

It is not yet clear if the plan will affect previous updates regarding withdrawals from the platform, which had been halted due to liquidity issues.

A court ruling stated that Celsius should return deposits to specific customers whose funds were not mixed with other assets.

Celsius has announced that it will communicate further on the way forward.

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Posted In: CryptocurrencyNewsMarketsBankruptcy HearingCelsius NetworkCrypto CommunityUnsecured Creditors Committee
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