An attorney for bankruptcy crypto lender Celsius Network said the company might value its CEL token at 20 cents during the recovery process, down significantly from its current market value of 54 cents.
In the wake of the revelations, lawyers for Celsius are wrestling with how to compensate CEL token holders without rewarding insiders who have enormous CEL holdings.
“I don’t think we’ve reached a 100% final conclusion there, but given the fact that the examiner report reveals in great detail how the price of CEL token was manipulated, we’ve really struggled with how to treat the CEL token and what is a fair value to ascribe to it,” Celsius’ lead attorney, Kirkland & Ellis's Ross Kwasteniet, told U.S. Bankruptcy Judge Martin Glenn.
“It’s our intention to suppress or subordinate the CEL token claims of insiders who were involved in the manipulation of the CEL token price,” Kwasteniet added. “It’s our intention that they would not receive any recovery or distribution on account of the CEL token.”
Celsius’ lawyers added that, if the estate were to value CEL tokens at the price of the petition date, it would take away value from the recovery given to holders of other cryptocurrencies.
Celsius customers attending the Wednesday hearing were not happy with the suggested recovery price.
“I would just hope that [the Unsecured Creditors Committee] take into consideration that a lot of the retail users did not buy [CEL] at 20 cents. We bought at all time highs, all the way down,” said pro-se creditor Jason Iovine. “It’s just more punishment on the retail users.”
UPDATE (Feb. 15, 2023, 16:30 UTC): Adds additional detail.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.