Celsius’ Leaked Documents Reveal Bold Business Plans Prior to Bankruptcy

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Key takeaways:

  • The Celsius Web Services (CWS) initiative, which Celsius Network offered to Goldman Sachs and ADQ, aimed to white-label its products, especially those with a yield and custody focus.
  • Alex Mashinsky, a former CEO of Celsius, was the driving force behind CWS and sought to fund $1 billion to launch the initiative.

Celsius Network, a cryptocurrency lending company that filed for Chapter 11 bankruptcy last year, made efforts to secure $1 billion for a project named Celsius Web Services (CWS), as per a report by The Block. Documents obtained by The Block revealed that Celsius approached Goldman Sachs and ADQ, an Abu Dhabi-backed fund, in May and June to discuss the CWS project. 

The initiative aimed to offer generic versions of Celsius’ yield and custody-focused products, presenting itself as a “web3 toolbox for a New World” in the pitch documents. The CWS plan, led by former CEO Alex Mashinsky, sought to raise $1 billion but was proposed before the company declared bankruptcy in July.

The proposed program involved offering generic versions of Celsius Network’s products, specifically those related to yield and custody. It was described as a “web3 toolbox for a New World” in one of the presentations.

Furthermore, Alex Mashinsky presented the CWS project to the Celsius Network’s Board, which included Laurence Tosi and a representative from Canadian Caisse de Depot et Placement du Quebec until June of the previous year. 

Surprisingly, despite these investors collectively investing $750 million in Celsius in 2021, they showed no interest in the CWS initiative. In an intriguing twist, a Goldman Sachs presentation from May 2022 disclosed that Celsius had intentions to explore potential collaborations with the bank to expand its presence in the cryptocurrency market.

Unfortunately, Mashinsky’s endeavour to introduce new products and shift Celsius Network’s focus away from its primary lending business couldn’t materialize quickly enough to prevent the lending side of the company from causing its downfall. Withdrawals were halted by Celsius on June 12, and a month later, the company filed for Chapter 11 bankruptcy. 

The bankruptcy filing revealed that Celsius owed over $4.7 billion to over 100,000 users.

As pressure mounted on Celsius in May, Mashinsky aimed to prioritize the CWS project as a response. However, this plan surprised others in the industry, especially considering Celsius had recently secured a significant investment of $750 million from external investors. The failure of Celsius Network sheds light on the risks and difficulties inherent in the crypto lending sector

Despite its efforts to pivot to other ventures like CWS, the company was unable to avert the collapse of its core lending business. This serves as a reminder of the importance of exercising caution within the crypto lending industry.

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Aadrika Sharma
Aadrika Sharma

I enjoy writing and try to learn new things every passing day!

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