• An attorney for bankruptcy crypto lender Celsius Network said the company might value its CEL token at 20 cents during the recovery process.
• The native token of the now-defunct crypto lender once traded at an all-time-high of $8.02, however regulators and Celsius’ independent examiner now say this was the result of price manipulation meant to benefit insiders.
• To compensate CEL token holders without rewarding insiders with enormous CEL holdings, lawyers for Celsius are attempting to suppress or subordinate the CEL token claims of those involved in the manipulation.
Celsius’s CEL Token May See 20 Cent Value in Recovery Process
An attorney for bankruptcy crypto lender Celsius Network has suggested that their native token, CEL, may be valued at only 20 cents when it comes time to recover funds from their insolvency. Previously trading as high as $8.02 due to alleged price manipulation by former CEO Alex Mashinsky and other insiders, regulators have since determined that such activity took place in order to benefit those with significant holdings of the cryptocurrency.
Price Manipulation Allegations
Regulators and an independent examiner hired by Celsius have concluded that insider manipulation of prices is likely what caused CEL tokens to reach an all-time high. To ensure these same individuals do not receive any benefits through the recovery process, lawyers for Celsius intend to suppress or subordinate any claims related to their holdings of the cryptocurrency.
Protecting Retail Investors
In order to protect retail investors who did not buy into CEL tokens at its lowest point (20 cents), attorneys suggest valuing them based on their petition date rather than current market value (54 cents). This would help prevent those with significant holdings from receiving a greater amount than non-insiders who bought into cryptocurrencies at higher prices without any knowledge of potential insider activity taking place in regards to pricing manipulation.
Reaction from Customers
Attendees of Wednesday’s hearing were unhappy with this proposed method of recovery, noting that many retail users had purchased tokens at much higher prices than 20 cents and should therefore be compensated as such. However, no final decisions have been made yet regarding how exactly recovery payments will be dispersed among creditors holding different types and amounts of cryptocurrencies.
It remains unclear how exactly creditors will be compensated after considering both insider activity and individual purchase prices when it comes time for Kelvin Network’s insolvency recovery process. Attorneys are still debating internally on what a fair value would be for holders of CEL tokens while ensuring none associated with price manipulation get rewarded beyond what others receive due to simply buying in at lower rates without knowledge of said activities taking place behind closed doors