Celsius CEO plans to restructure to focus on crypto security: Report

Crypto lending platform Celsius, currently in the midst of bankruptcy proceedings, is reportedly planning to rebuild around crypto protection services.

According to a Tuesday report from the New York Times, Celsius CEO Alex Mashinsky and Chief Innovation Officer Oren Blonstein are planning to revive the company using a project called Kelvin — storing users’ crypto and charging fees on certain transactions. Mashinsky made the announcement at a Sept. 8 staff meeting, during which the company discussed its future after filing for Chapter 11 bankruptcy in July.

The Unsecured Creditors Committee, a body representing Celsius creditors, has asked the firm to continue offering services including loans, shares and protection. Maskinsky compared the platform’s potential return to that of Apple and Delta Air Lines — the companies that launched in 2015. They went bankrupt in 1997 and filed for Chapter 11 in 2005.

In its current business model, Celsius said it does not charge any fees for transactions, exits, originations and early terminations. The report cited a person familiar with the matter as saying that the committee expressed concern about Mashinsky’s plans for Celsius and the proposed Kelvin project.

“If the basis of our business is in foreclosure, and if our customers sell somewhere or exchange one property for another or take out a loan on a property, we need to have the ability to charge a commission.” Blonstein told the Celsius staff.

Related: Celsius loss processes show complexities at a time when the prospect of recovery is declining

Regulators have filed allegations against Celsius in bankruptcy proceedings in court. On September 7, the Vermont Department of Financial Regulation charged both Lending Forum and Mashinsky with misleading state regulators about the firm’s compliance with financial health and safety laws. Users have sought legal remedies to recover more than $22.5 million in funds held by Celsius after it was frozen in June.