Tradingjem Group cryptocurrency trading
AI Trading

Leaked audio has recently revealed that crypto lender Celsius Network wanted to pay back its clients by creating an IOU cryptocurrency.

A Celsius client provided the audio in question and it reveals that the bankrupt crypto lender had been interested in creating a kind of ‘wrapped tokens’.

These would represent the amount that the lender owns to the customer and also the amount left on the company’s balance sheet.

According to the pitch, if clients of the crypto lender hold onto their tokens, it is possible that they could mitigate their financial losses.

AI Trading

The beginning

The Celsius bankruptcy case saw a court-appointed examiner added and the crypto lender also attempted to reopen withdrawals for specific clients.

Now, the leaked audio is shedding light on the company’s plans of creating an IOU cryptocurrency. The entire scenario began on June 12th when the crypto lender first announced that it was pausing withdrawals, transfers and swaps.

After a number of restructuring and insolvency rumors, Celsius eventually ended up filing for Chapter 11 bankruptcy protection a month later.

The audio was shared by a Celsius client with CNBC in which the concept of an IOU crypto is highlighted.

Token creation

It should be noted that Celsius is not the first crypto business to come up with the idea of developing a token for repaying its debt.

The same concept had also been lost by a crypto exchange called Bitfinex when it suffered losses of about 120,000 BTC in a breach that occurred back in 2016.

A ‘Recovery Rights’ coin had initially been issued by the exchange, which it had named BFX tokens and it announced that it had paid the debt in full by April 2017.

A client named Tiffany Fong had obtained the Celsius record that disclosed the plans and CNBC was able to get it from her.

The news outlet also verified from former employees of Celsius that the recording was ‘authentic’. It allegedly features the co-founder of Celsius, Nuke Goldstein, and Guillermo Bodnar, the chief technology officer.

Wrapped tokens

The audio reveals that a kind of ‘wrapped tokens’ would be used as IOUs and the staked Ethereum and the mining business of the company could be used to back them.

Crypto proponents had discovered a substantial amount of staked ether (STETH) that was allegedly connected to Celsius, just two days before the lender had paused withdrawals.

According to Goldstein, this plan would be applicable to clients who made use of the ‘Earn’ account. Bodnar stated in the recording that the idea of the IOU token was still in its ‘early stages’.

The audio also disclosed that Bodnar planned on coming up with another idea for compensation. He had talked of a ‘transaction management system’ that would provide better ‘transparency’ to Celsius customers.

Celsius already has a token called Celsius network (CEL) and it was supposed to be the backbone of the lending platform to create value for its members.

At the time of writing, there were 423,415,980 CEL tokens in circulation.

AI Trading produces top quality content for crypto companies. We provide brand exposure for hundreds of companies. All of our clients appreciate our services. If you have any questions you may contact us. Cryptocurrencies and Digital tokens are highly volatile, conduct your own research before making any investment decisions. Some of the posts on this website are guest posts or paid posts that are not written by our authors and the views expressed in them do not reflect the views of this website. Herald Sheets is not responsible for the content, accuracy, quality, advertising, products or any other content posted on the site. Read full terms and conditions / disclaimer.

Mark Ackman

By Mark Ackman

Mark Ackman is an experienced news writer and analyst with a knack for uncovering the heart of a story. His articles are insightful, informative, and well-researched, providing readers with a nuanced understanding of complex issues.