According to a report from The Block, Celsius Network, a cryptocurrency lending company that filed for Chapter 11 bankruptcy last year, had attempted to raise $1 billion for a project called Celsius Web Services (CWS).
CWS aimed to offer generic versions of Celsius’s yield and custody-focused products and was described as a “web3 toolbox for a New World” in pitch decks presented to Goldman Sachs and Abu Dhabi-backed fund ADQ May and June 2021, respectively.
Former Celsius CEO’s Plan
Celsius’s former CEO, Alex Mashinsky, spearheaded the CWS plan, but the project failed to get off the ground as investors, including Celsius’s board, chose not to participate. Mashinsky had hoped to pivot Celsius away from its core crypto lending business and create the “Amazon Web Services of crypto” with CWS.
The CWS plan was seen as a last-ditch effort by Mashinsky to save the company, as employees openly expressed concerns about Celsius’s financial health in May 2021. However, according to The Block, Mashinsky continued to assure customers that all was well.
Mashinsky was later hit with a civil lawsuit by New York attorney general Letitia James, who accused him of misleading investors about the health of Celsius. Mashinsky dismissed the fraud claims as “baseless.”
Celsius’s lending business ultimately led to its downfall as the company froze withdrawals on June 12, 2021, and filed for bankruptcy a month later. Over 100,000 users were owed over $4.7 billion. Despite Mashinsky’s efforts to launch new products and pivot the company, CWS couldn’t save Celsius from bankruptcy.
The CWS plan was also likened to Plaid, a fintech startup that helps customers connect their financial data to new apps and services, by a second source close to Celsius.
While the CWS plan did not come to fruition, it offers insight into how Mashinsky hoped to save the company. The plan involved white-labeling Celsius’s products and offering services for business transformation and growth.
The types of services in the pitch deck included yield, custody, on-ramp services, and a tool for bridging centralized and decentralized ecosystems. The CWS project had the board’s and external investors’ full backing, but ultimately, Celsius’s existing investors chose not to participate.
The Network’s Custody Settlement Withdrawals For Eligible Users
On May 9th, Celsius Network announced that withdrawals have begun for eligible Custody account users who have opted into the Custody Settlement. The settlement was authorized by the Court last month and allowed users to receive a distribution of their assets in exchange for electing not to pursue any Custody-related claims or causes of action against Celsius and for voting their Custody claims in favor of the Plan.
Last month, the Court authorized our settlement with the UCC and Custody Ad Hoc Group. Today, withdrawals begin for those who have opted in to the Settlement.
— Celsius (@CelsiusNetwork) May 9, 2023
Furthermore, according to the announcement, the distribution of eligible assets will be carried out in two stages. The first distribution consists of 36.25% of each settling Custody account holder’s Custody account balance. Users can withdraw their assets once all account information is updated and verified. Moreover, the Network has provided a Custody Account Withdrawal FAQ for users seeking more information.
Featured image from iStock, chart from TradingView.com
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