The lead investor at Celsius Network BnkToTheFuture, and the co-founder of the protocol Simon Dixon, have proposed a recovery plan for the Celsius Network. The two have proposed implementing the same recovery model adopted by Bitfinex following the 2016 hack.
Celsius Network recovery plan
Dixon released a statement on Saturday saying that the solution for the network did not lie in traditional finance. The Celsius co-founder also added that the events with the Mt.Gox exchange show how unreliable the traditional finance was in solving crypto matters, as the case remains unresolved after a decade.
“I believe that this can only be solved with a solution using financial innovation like we did with Bitfinex that was resolved within 9 months and worked out well for depositors,” Dixon added.
Your capital is at risk.
The recovery plan tabled by Dixon is borrowed from Bitfinex, a crypto trading platform. The platform suffered a breach in August 2016 and lost around 120,000 BTC, with customer losses accruing to $72M.
Bitfinex proposed an innovative recovery plan where customers were to be paid back in BFX tokens. The tokens could be traded openly, or they could also be held by those who anticipated the exchange’s recovery.
BnkToTheFuture, the largest investor on Celsius, said that “in 2016, Bitfinex needed a plan to recover from their hack and the company I co-founded, BnkToTheFuture, supported them and executed a recovery that involved security tokens, debt, and equity and gave investors a very high return for the high risk they took.”
Dixon did not provide any in-depth details about the proposed recovery plan. Therefore, Celsius users remain uncertain whether it would involve a token or the situation would be solved through other innovative strategies.
Celsius released a statement on June 20 saying, “It has been one week since we passed withdrawals, swaps and transfers. We want our community to know that our objective continues to be stabilizing our liquidity and operations. This process takes time.”
Celsius short squeeze
Celsius users are not sitting idle waiting for a solution from the co-founders. The community has initiated an unofficial recovery plan, quickly gaining traction on Twitter.
The community is trying to force short sellers of the CEL token to cover their short positions. The community is buying and pumping CEL tokens and withdrawing these tokens from exchanges. This strategy was witnessed on Reddit early last year when users of a subreddit pumped GameStop and AMC stocks to short squeeze Wall Street short-sellers.
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