• Tiffany Fong

LEAK #1: Celsius Network's Internal All Hands Meeting - CEO Alex Mashinsky + AUDIO

Updated: Sep 29

For context, I am personally a Celsius Network customer who left 3.1 BTC & 11.5 ETH in the Earn program. Recently, an anonymous source (using encryption) sent me an audio file of Celsius Network’s Internal All Hands Meeting, which took place on September 8, 2022. To be clear, I do NOT work at Celsius Network. I was NOT present for this meeting, nor was I aware it was taking place. I did NOT ask for it to be recorded nor sent to me. As a depositor and unsecured creditor myself, I know many of us have been seeking transparency from the company as to what exactly is happening with our funds and what Celsius's next steps will be. Therefore, I felt it would be beneficial to many of us depositors to share what I was sent. I transcribed the full audio with painful precision below. The meeting begins with a general discussion of the world’s economic state, then delves into Mashinsky's thoughts on Chapter 11, proposed next steps, and future plans for the company:

FULL AUDIO: YOUTUBE

EMAIL: TIFFANYFONGNYC@GMAIL.COM

CONTACT ME: TWITTER / INSTAGRAM / YOUTUBE


ALEX MASHINSKY: This is an experiment that we’ve never gone through and this could easily break, not just the US economy, but the entire world economy since the world runs on U.S. dollars and the world is indebted to the United States - meaning most of the world debt is in dollars meaning the world is short dollars. So when the dollar goes up - the dollar is the highest it’s been in 20 years - so when the dollar breaks those kinds of levels, it breaks everything around the planet, right? Because countries can’t pay their debts. Inflation gets out of control, chaos ensues and so on. So right now, there’s 40 countries in the world that have double digit inflation, right? Where we went from a world in which we basically had no inflation - almost everybody in the world had close to zero inflation - so in the span of two years, right, we went from everything wonderful to global chaos, war, pandemic and so on so on. So I expect to see a lot more carnage and a lot more pain, and I think you heard that from the Fed Chairman saying, “Hey, pain ahead!” but I think that the amount of pain that is expected is more than what most people perceive there to be. So I’m not here to tell you “doom and gloom” - I’m just explaining to you that, again that, bitcoin and all other cryptos are attached to risk assets and these assets will continue to go down in value as long as the dollar keeps going and as long as QT continues.


So we should all be ready for a long winter. Again, Celsius is in a relatively safe place filing Chapter 11 vs a lot of other players who cannot just cease operation or stop or take shelter or anything like that, so we may have been the first or the second to jump into safety, but you will see many many other organizations have the same problems. For example, the fourth largest mining pool, Poolin, if you didn’t see them, have exactly the same problems that we have of lack of liquidity and inability to provide withdrawals. They paused their withdrawals, again that’s the fourth largest pool of bitcoin mining in the world. Bigger than Celsius in all terms and so on, so I think also you’ll see the same thing happening with countries and with banks and financial institutions all over the world, so pain is gonna be severe. Our job is, again, to fix and use this time to reorganize the company so we can come out of this - when the clouds eventually dissipate - we can come out of this stronger with the right systems and people and everything else to go back and restart our business.


So like I said before this conversation, we have 3 parts. First part, we need to return deposits to people who are in custody. Again, we are still working out the details with the US Trustee and the UCC and other people who all have different .. they want things done differently so we’re waiting for resolution. The judge has to basically agree or come to consensus on what should be done, and our team will be ready to reopen those wallets and allow those people to withdraw. Unlike what you read in the news or whatever, it’s not like we don’t want to give coins back, or we somehow are slowing down the process or anything else. It’s in our best interest to allow as many people in custody to get their coins back as fast as possible. We know people are suffering, we want them to have liquidity, and we’ve done everything we could to provide all the information necessary so this process can get started and we expect something around the November 1st date as the effective date of when we will … well we are ready, the technical team, we are actually ready the week of September 12, right, so next week effectively we will be ready to enable this, but again the legalities have not been resolved. It’s more about, ok, if somebody took a loan but their assets are in custody, are we allowing them? Not allowing them? and so on and so on. It's a lot of little details that need to be resolved. So custody is number one.


The second part is returning the rest of the coins, so that will coincide with us reopening, right, but that’s a separate chapter, right, so how do we return the coins? Who gets what and what are the denominations? How much did we recover? All those things are still in the works and again I presented our plan to both the UCC and to the equity er, the people that hold equity in Celsius: the people who participated in the A round, the B round and so on, and we are waiting, again, to get consensus there to get an agreement between all the parties on what that return looks like and the sooner the better. We want to basically enable people to get access to their coins. So that’s the second chapter.


The third chapter is us reopening our services, right? So we gave it a code name: Kelvin, absolute zero. So we are planning to basically reopen with a process that does not require you to trust us in anything. We are working, again, Guillermo and Oren are leading, kind of the requirements and the ideas that are the best things we can add or provide for our customers to be able to continue using our services like Celsius but not have to trust us with: Where are the coins? What are you doing with my coins? You know, where are you staking them? and things like that. So we’ll get into the details Oren will be presenting in a minute


We had a Third Day Hearing: most of the discussions were around the motions that were filed and, again, I urge you, all of you, to use the Stretto and the court system to get your facts from there and not from Twitter and not from other places. I would say that probably 90% of what I read on Twitter is not true or inaccurate or intentionally misrepresenting the truth. As one example, Simon Dixon, who keeps jumping into everything Celsius recently bought Salt Lending according to what I’ve read. So he bought the competitor of Celsius and he goes on Celsius channels trying to convince everybody how bad things are so that hopefully one day, we’ll switch over to his service. Same thing with other people like Cory Klippstein and others who have a competing business or are in the mining business and want Celsius to fail so that they’ll have less competition and so on - so my point is, just that you have to be very careful who you listen to and where you get your facts from and I urge all of you to stick to what… you can be sure that anything that we file with the court has been vetted by the best lawyers in the world both for being factual and for representing the truth, and everything else that is provided is hearsay or allegations, right? So just be very very careful about that. I’ve heard that a lot of employees are concerned about some of these things so I wanted to dig into that.


So we filed a new set of financials if you haven’t seen. Chris provided the court with an update - we do an update every few weeks and, again, if you want to know what the size of the hole is, look at those financials. It hasn’t changed - it’s not like it suddenly went from 1 billion to 4 billion just because somebody says that on Twitter, again, doesn’t mean it’s true. Our assets and liabilities are more or less the same. They don’t move a lot and our cash position does change a lot, so our cash position increased because we actually collected something like 61 million dollars and, again, these were assets recorded as stablecoins and we figured out they were actually cash. So the cash balance has increased and the stablecoin balance has decreased a little bit. And again, if you were listening to the court proceedings, they use the words, “Oh, you found money and you didn’t know where it was?”’ NO, we knew the whole time where it was, we just had it categorized as stablecoins rather than cash. So all these things matter. The company has plenty of cash to continue operations through next year, and we’ll be providing additional updates. And as we recover, we wanted to file the most conservative plans we could come up with to make sure that we can only surprise to the upside vs have bad surprises or negative surprises. And I think since we filed you’ll agree with me that that has been the pattern: we surprise to the positive, not to the negative both on the cash, on the coins, on recoveries and things like that. So that’s our intent going forward. We’re planning to surprise everybody to the positive.


Also, we continue to do cost reduction so as you know, we reduced payroll. We also reduced expenses. I think we’re down by almost 2/3 and the more we can kind of bring costs down, the easier it is for us to reopen, and the easier it is for us to show the UCC and other stakeholders that we can continue the business without having problems - without burning cash. We hope that we can run the business being a profitable entity so we rightsize the business for these plans to reopen and what you’re going to see from our end is in the context of the size that we are right now. We’re at about 270 people and we plan to stay at this level to be able to reopen and provide the services that we need for our community. Most of our community, including the UCC, has asked us to continue services. If you’re listening and joining in on Twitter spaces or you heard what the UCC had to say, they want the company to continue both because there’s value in the company and because they think these services are valuable and they want to continue using the loans and the staking and the custody and things like that.


Alright, I think I covered all my points. Oren, I’m handing off to you! I think you have a presentation. You can share a screen and we’ll take some questions, so post your questions in the chat. I see there’s one already and I’m handing off to Oren.


OREN BLONSTEIN: Thank you, Alex! Let me share my screen… So I think a lot of the times I’ve been speaking to the company, it’s been in my capacity as the Chief Compliance Officer, but for the past two months, I’ve been working with our product and engineering teams on our product development efforts. And I was thinking, a good place to start for talking about how we’re thinking about the go-forward or what comes next uh, just to share some, like, context for how we’re thinking about it…


ALEX MASHINSKY: Oren, maybe just give people some background on your experience.


OREN BLONSTEIN: Sure, sure, yeah, I’ve been working in financial services for about 20 years, the last 5-6 in crypto. I’ve run some crypto exchanges, worked at a bunch of different crypto projects; before I joined Celsius, I was at Huobi Labs. When I joined Celsius, I was initially running innovation - so some of our new products - then compliance, and now, working on all of the above. So hopefully that’s some good context. I have two young kids so I’m up almost all the time.


Ok, so let me switch back. So in context, and uh maybe this is a little bit, uh, there’s a story involved here: there’s a common story structure called the Hero’s Journey. Kinda follows a call-to-action, right, like this hero has a mission, something that they want to accomplish. They experience an initial success, they stumble, fall short in some way, and have this dark moment… and that’s kind of like where we find ourselves at this very pivotal moment in the company’s journey. And so like, you know, we’ll talk about like the later stages of this, right, so persevering through that dark moment transforming and eventual victory and so a lot of these themes are things that we’re thinking about when we’re thinking about how to build, how to go on, how to move forward and uh some of the key themes are: adversity, uncertainty, and what it's going to take to move forward is really perseverance. So how does this apply to us? We obviously grew incredibly fast. I’ve only worked in startups in my career. I’ve never seen a startup grow as fast as Celsius did. Obviously, you know, there were some hard lessons learned but we are at this critical point. And I think, like, one of the things we were talking about this morning with the product team is: if anyone doubts the importance of where we are and what an important moment this is. The entire world is telling us this every day, right? Headlines in major media, millions of people watching us, clicking on articles online, if you add Celsius to an article, it automatically… you’re gonna get a lot more eyeballs looking at that article.


Obviously hundreds of thousands of customers, regulators, creditors, and the UCC, so tons of people are looking at this and how this ends, and how we move forward is going to affect the entire industry so there’s no doubt about the importance and really the question is how we respond to it and I think something I think about and a lot of people think about on the team is that if we give up now, you’re selling at the bottom right? And the opposite is that if we are successful, it’s gonna be a success story like one that’s never been seen before. And I think there’s some really innovative stuff that the team is working on for how we go from here to uh, a victory and I want to go through that in more detail.


So this path to earning trust… I think this is one of the questions that was asked in the chat, was like how are we going to earn trust? And I think one of the foundational products that we’re going to offer in the future is custody, and the core concept of custody is that that’s your property and we’re holding it on your behalf and so that’s what we’re gonna be offering. That’s a core part of what we’re gonna be offering in the future - we have to show people that that principle of this being their property that we’re holding on their behalf means that they’re going to get it back. So the first thing that we’re trying to do, Alex referred to this and I think a lot of people are involved in these projects, is to restore access to custody accounts and this is going to happen in multiple stages like Alex talked about. There’s a lot of complexity that gets introduced by attorneys and advisors and courts and other people about, like, which specific assets within custody are available for customers and in what order, so this will be a multistage process, but that’s definitely the first part of the process. And then the next part of the process is reactivating custody accounts and associated services.


The next part is a crypto-based solution to honoring creditor claims, and we can’t get into too much detail at this stage because the proposal is not public, but you know, Alex did make the proposal and got positive feedback. And this is really how we resolve this: how we get out. What we do in this pivotal moment can be through unprecedented, really innovative solutions, and this is one of them - is to use crypto infrastructure as the framework for returning or for delivering or allowing our customers to get their claims on the assets that were in the earn program.


So this proposal, by the way, is under review by the UCC. So once we get more feedback from them, we’ll be able to talk more about it. So the idea is, we’re giving people - restoring access to custody - we’re also gonna propose that we re-enable certain key services, so for customers that have funds in custody, our proposal is gonna be that they’ll be able to stake, swap, and potentially take loans against those assets and then make available the assets that were in the earn program through this unique crypto solution that we’ll talk more about in the future and then that brings us to NEWCO.


So this is basically, some people would call this, like, Celsius 2.0. Alex referred to this as Kelvin for people who are not familiar that Kelvin is a temperature system - I should’ve done more research on this - but the key thing I remember from school about Kelvin is this concept of absolute zero. So one of the ideas with Kelvin with this new Celsius 2.0 and calling it Kelvin is absolute ZERO TRUST involved. So in other words, that’s one of the kind of principles in crypto in the first place, is that you should be doing your own research, you should be able to verify that things are completely transparent, and that’s one of the core attributes that we want to embed in this NEWCO is making sure that everything that we do is transparent: it’s on the blockchain, customers can see what’s happening with their funds. There’s no dependency on, you know, they don’t have to hope that Celsius is doing the right thing, they can SEE it and, um, then basically building on top of that, we would offer a new set of services. So I’ll go into more detail, but maybe before I do that, I’ll pause for some questions. Any questions so far? Yeah go ahead


EMPLOYEE 1: I just have a question: if we go with this plan, how will this create revenue for our company if we start offering custodial services? The gains will not be as high as they used to be in the past, if I figured out this correctly?


OREN BLONSTEIN: Yeah, I mean most of the businesses in crypto today earn fees from commission on transactions or AUM based like a percentage of the assets under management. So like, take Binance as an example: they’re earning billions of dollars a year in revenue by charging a transaction fee on trading. So if we start as… if the foundation of our business is custody and our customers are electing to do things like stake somewhere, or swap one asset for the other, or take a loan against an asset as collateral, we should have the ability to charge a commission for that transaction, right? It can come in the shape of a commission as like, adding a spread, but there should be no problem with us generating revenues from this. It’s just gonna obviously… we will need to be able to successfully convince customers that Celsius is a place that they can park their assets and have trust, you know? They will have to trust us as a company. But we’re going to try to remove as much er… we will try to minimize the amount that they have to depend on just trust because it's going to be blockchain based and they’ll be able to verify.


EMPLOYEE 2: I’m just curious about the trust component of all this. Haven’t we built a business by telling our customers that we’re not going to institute fees or charge them to get their money out and by completely switching our business model to a fee-based commission-based program, isn’t that a violation of the trust of the customers that we got for the first couple of years we were in business? And if we’re going to create this relationship built on trust, were there any concerns about how to model that out from a revenue perspective… this potential lack of trust?


OREN BLONSTEIN: Sure, I mean, you know one thing is like –


ALEX MASHINSKY: I can jump in, if you want. So this is not a new effort. In 2022, we started developing many services that were fee-based we just didn’t have a chance to launch them, but basically everything we were about to launch including withdrawal fees and transaction fees, you know, were all things that were in the making and we have not seen any problems with customers saying “oh my god, if you charge me a fee, I’m leaving immediately!” The opposite, I think. A lot of people there probably was a lot of mistrust because we didn’t charge fees, because people couldn’t understand. They don’t understand what rehypothecation is or other things, and they couldn’t even understand in the lending business how we could pay 5% on yield, but only charge 3% per loan for the same asset, right? So this is an opportunity to reset all of that and again, through the transparency, show everybody how the math works: where the coin is going step-by-step instead of asking them to trust us with everything the way we’ve done over the first five years.


OREN BLONSTEIN: Yeah, fees are normal, right? People, when you value something, you’re willing to pay for it. If we’re delivering valuable services, people should be willing to pay for it and… just one thing I want to highlight… there’s a very good chance that a lot of customers say, “I’m done I’m out”. And something important there is that, you know, when I was in the innovation role and talking to lot of companies that were doing stuff that was similar to Celsius, these companies have like 10, 20, 30, maybe a couple of them have a couple hundred million dollars in assets from their customers. If we were to get like 5, 10, 20% of our customers to stay with us, you’re talking about starting a company with hundreds of millions of dollars and potentially hundreds of thousands of customers.


So like, right before I joined Celsius, I was at a startup. I mean, you know, to start a company with a million people - millions of people looking at, you know… we have instant awareness. We have a set of customers. We have assets that generate revenue. We have funding, initial funding, right? So we have a lot of... it’s basically like a startup on training wheels and some pretty good training wheels. And so I think like, my point is just that these other small companies that were doing what Celsius is doing, they would KILL to start with and to have the assets that, like, would be kind of a worst case scenario for us. So I think it’s just something to keep in mind is that, like, because we hit this high water mark of $30 billion, people think about our business shrinking as the end of the world. Well, a shrunken version of Celsius is still a bigger business than a lot of the other companies out there, and it’s a great position to be in from a startup perspective.


ALEX MASHINSKY: Yeah, just to add to that, I don’t know if you guys saw but Inc. Magazine published their list of the 5,000 fastest growing companies in the US. Do you know who was #1 on the list? Anyone? BlockFi was ranked as #1 with something like 240,000% growth over a 5 year period. Celsius grew faster than BlockFi, we just didn’t apply for Inc. Magazine, and Blockfi went through the same thing right. The two largest lenders to 3AC was Genesis at $2.4 billion - they lent to 3ac - and BlockFi with $1.3 billion in loans. So one bad decision caused BlockFi to basically almost go out of business. They got bailed out by FTX, and they didn’t have to file Chapter 11, but if they were not bailed out, they would be in Chapter 11 just like Voyager and Celsius and everybody else who was stuck in the same situation.


My point is, to what Oren was saying before, obviously we provided a needed service, and we grew faster than we could manage. We have an opportunity now to reorganize and I’m gonna stress that uh like, how many of you guys drink Pepsi vs Coca Cola? At least a third drinks Pepsi? Well, Pepsi filed for bankruptcy twice, right? Does it make the Pepsi taste less good? Right? Delta filed for bankruptcy, right? Do you not fly Delta because they filed for bankruptcy? So the point is, a bankruptcy filing is a test for the company - it’s a test of: should you come out or should you disappear?


And if you wanna know if we should come out, just go and join any of the Twitter spaces or Reddit or any of the other channels in which the Celsius community is talking to each other about Celsius. Alright? Zack, one of our ex-employees, had a session yesterday. There were something like 700 people on it and people were basically - you know, there was more camaraderie than we sometimes have INSIDE the company, you know, supporting each other and asking for, obviously, the company to reopen so they could have access to the coins, but also asking us to continue the services.. asking us to continue this movement. So if you’re in doubt, listen to the community, because we built this company for them, right? And yes, we had some mistakes, and if you read my declaration, I bear it all out there, but this is our opportunity to fix the things that we’ve done wrong, to fix some things in the business model that were not necessarily operating properly and relaunch perfectly, right? So Apple, in 2001, I received this award, the Einstein Award for Innovation and the guy next to me, he received the award also - another award from the same institution - he was the inventor of the CCD, the cameras we all use on your devices - the device inside each one of these cameras is a CCD, and so Gil Amelio was the CEO of Apple. He already drafted the paperwork to file for Chapter 11, right? Apple almost filed for Chapter 11. Don’t believe me? Google that. Steve Jobs jumps in, right? He saves the company, cuts the products by 80%, he goes to his arch enemy, Microsoft, and gets a loan from them to keep going, right? And now it’s one of the most valuable companies in the world. Right? So yeah, filing or almost filing Chapter 11 is just a test. It’s a test to see if you should exist. Do you belong in the business world? Are you gonna do good or not? And this is exactly what we are facing right now. We are facing a test of, you know, are we gonna come out of this stronger like Apple? Or are we gonna be in the dustbin of companies that were great or almost-great or great for a while, but disappear? Right? The community is behind us. I have no doubt that we’ll have plenty of assets to manage, the question is, are we gonna give them the products they need? The services they need? Are we gonna design them properly? Are we gonna avoid other mistakes and learn from the mistakes of the past? Oren, I cut you off..


OREN BLONSTEIN: If people have other questions…


EMPLOYEE 3: So I do have a question. Firstly, it’s really nice to hear that there’s so much optimism for us to keep on working whether it be at Celsius, or any other name. However, one of the main issues is that, me personally, it sounds like how it was at the beginning of Celsius. Like all of the promises of transparency and all of that. It’s like it sounds like at beginning of Celsius, and it’s indisputable that Celsius is one of the most, if not the most rapidly growing companies of our time. However, it doesn’t sound like there is … I don’t understand … how are we supposed to treat it? Like what is it? What would be the service? How are you guys going to gain back OUR trust as employees who saw their friends, sometimes even family getting booted out because of mistakes that were done? I just don’t hear that, and this is something that really personally bugs me.


OREN BLONSTEIN: Yeah, I mean I was uh - before the presentation - last night, I was looking at re-reading our white paper, you know, before I joined the company. And you know something, like to your point, is like, the reason why the company was started still exists, right? Like the, like, or that problem still exists right? Like no one has solved that problem, as far as I can tell. No one is really interested in solving that problem, and I mean, that’s one of the things that motivates me about… or motivated me to join Celsius and still motivates me, right? Is that I feel like a lot of other companies in crypto are just trying to build the same ol’ thing that exists in financial services, but you know with a crypto sticker on it. Versus what we’re trying to do is something really different, but to your point, like we said, we were gonna do these things in the beginning and it didn’t work out that way and I think that’s the part about learning a lesson. You know, trying, things not working, learning a lesson, and hopefully doing a better job the next time. Just one thing is that, there have been huge advances in technology and also, like, the building blocks in crypto that will make us more able to deliver on some of these things than was possible in the past. There were not for example SMPC Secured Multiparty Computing - existed in the past, but there’s like, there are new technologies built on top of that that could allow us to deliver really unique things like where someone where we can have custody of an asset, but still allow a user to be in control of that asset and that’s technology that was developed by the Celsius X team.But I’m just saying that, like, some of these things that prevented us from delivering the stuff that was talked about in the whitepaper, are much easier to accomplish now because those building blocks are there, and I think that’s a fundamental difference is both, like, the willingness of us to do it and I think now, we have that motivation to make sure we do it right this time. And then the second part is that the tech is there, right? Like before, we would’ve had to build everything and just remember, when the company started, I think AAVE was around it was called ETH Lend or something like that. There were not like .. none of the… a lot of these things didn’t exist.


ALEX MASHINSKY: To add to what Oren is saying, most of us at Celsius are kind of sophisticated or heavy users of crypto and how many of you know how to set up a multisig cold storage wallet? So I want to store my coins, but I want multiple signers for security reasons.. and who do I trust to be the other multisig? Like Vitalik, for example, has one of the signers is his father, and the other signers he hasn’t disclosed, but he has six signers for anyone to move coins from his ETH wallet, so this is an example of a service that we want to provide in our custody solution. That’s one of the reasons why we partnered with GK8 and so on is to… as a native, at an instant, you open a wallet at Celsius, you automatically get a multisig. We’re a signer, you're a signer and we have a third party that we both trust for security reasons, right, or dispute resolutions, or kind of other things.


And so again, if you want to bring a billion people into crypto, and that’s the only thing that’s going to make these coins go up, if you heard the beginning of my speech, right, with the dark clouds that are headed towards the world’s economy, right, eventually people will say, “Oh, I can’t trust the dollar. I can’t trust the euro. I can’t trust all these other things”, but it hasn’t happened yet, right? So today, if you do a chart of the dollar, you’ll see that bitcoin does exactly the opposite. If the dollar goes up, bitcoin goes down and if the dollar goes down, bitcoin goes up, right? So we need to, again, bring all these people in. One of the key things, to Oren’s point, that we haven’t solved - no one has solved - is key management, right? One of the reasons we filed Chapter 11 is ‘cause Fireblocks lost our keys for ETH, right? So all these things, even us and Fireblocks, have problems managing keys, and Stakehound, and so on and so on. So this is not something simple. It sounds like it’s simple. It sounds like, “oh people solved this 10 years ago!” but the reality is that we haven’t, and if we, the pros, can’t manage it, then how many people out there can manage it? 20% of all bitcoin holders lost their keys, right? So you can’t have an industry imagine, again, that if everyone had to manage their own keys. It’s just not a sustainable proposition. So we’re gonna reopen the things that we do best, again: custody, staking, loans, right? Simple things that we’re already doing and build on top of it, but they will have certain benefits that people don’t have today. And again, we don’t plan to provide it for free. You want the multisig? You’ll pay $50 a year or something like that to have that set up in the Celsius environment.


OREN BLONSTEIN: I want to just flash something on the screen and just talk about, for a second, like why the claims solution that we have … why we can’t talk about that. This is my what Compliance Officer had on and I mentioned this in the past, is that because some of these things are in discussion with regulators and the UCC and other people, if we present this stuff to the company and someone takes a screenshot and posts it, or somehow releases this information, that can seriously negatively impact those discussions right? and can basically like… a regulator, or somebody might hear about this and say, “Wait a minute, you guys are thinking about doing what?” And uh and uh that’s why we’re not gonna be able to share some details about this until we get further along uh in those discussions so I just wanna like explain why we I can’t go into detail on some of these things.. but if people have questions please send them so we know what to provide updates on as soon as we can share that. But I hope that makes sense to everybody why and uh let me ... what I do want to show though quickly...


ALEX MASHINSKY: - just to add to that, we have to file everything with the court it's not like this will be done in secrecy or anything like that we will be filing - The minute us and the UCC agree and the seven unsecured creditors - or people that hold coins on Celsius that represent all of our customers - the minute they agree to the plan, we’ll file together a joint proposal for judges to approve it, other people to approve it, and it will go effective. So you will see that filing and, again, we’re trying to get all that stuff done. I think in the last All Hands we did, we showed you kind of the timeline. It’s also on Twitter of what happens when in the bankruptcy process so we have 120 days to file a plan and we’re trying to file that plan with the UCC, with our Creditors, not just file a Celsius plan. So that’s kind of like, the timeline we’re expecting. We might ask for more time, but we’re trying to get that done in the first 120 days.


OREN BLONSTEIN: I was just going to talk briefly about the NewCo again. So one of the important things to address on the phone with everybody: some people will say, “well why don’t we just give everything back? You know, convincing customers to come again, trying to earn their trust - it’s too big of a challenge, you know, we shouldn’t do that”. So first of all, like, if again, a lot of people joined Celsius because you were motivated by the mission, you know, of giving people who normally wouldn’t have access to some of these financial products access to them - so that’s mission number one, this new mission that we have is basically that if we just take everything we have now and sell it and try to give people back their money, and give people back what we have, it’s not enough, right? And so we need - our second mission now - is we HAVE to be successful with this new company in order for us to maximize how much we can return back to our previous customers, and also to fulfill the mission that we have / had for the company. So like, just want to emphasize this, us making NewCo successful enables us to deliver on our obligations to our customers, right? So it’s not, you know again, like what I said at the beginning about this pivotal moment, like walking away from this is selling at the bottom and everybody loses. Right? And so, this NewCo is really about fulfilling our obligations and also continuing on on our journey towards this mission of expanding access to the financial services. And, um, and then I will switch… I’m blocking out some of the later phases here, but just to get some specifics, you know obviously we talked about the first phase is going to be restoring access to custody accounts. We’d also like to, shortly after that, offer staking. We have a bunch of stakable assets. We’d like to offer customers a way to do that, and then the next phase: start to re-enable some of these services like swaps, on-ramps, cross-chain bridging, which is kind of a default table stakes, and there’s some other things that we’ll get into more detail in follow-up presentations. Um, 8 minutes left if people have other questions.


EMPOLOYEE 4: When can we expect this to go live?


OREN BLONSTEIN: One of the things that I feel the urgency for, is our need to exit Chapter 11. Maybe that’s obvious to most people, so like, why do we need to get this plan together, get it approved, and get it executed is that every day that we’re in Chapter 11, we’re spending a lot more money than we should be on advisors and attorneys and all these different costs. The longer we’re in Chapter 11, the deeper the hole we’re digging. So like, the motivation to get this new thing up and running should be high because if we want it to be successful, we need to go back to the - move towards - a more sustainable cost which means we need to get out of Chapter 11. So if you don’t feel the urgency today of getting these things done and exiting, like this is, I’m trying to share the reason why this is so important. And so in terms of the timing, it's basically as soon as we get the plan together, as soon as we start executing, as soon as we get the approvals necessary, that’s what will dictate when we can exit and when we can launch these things. But and uh, I think Alex said in the summary of the Third Day Hearing, we submitted a motion for the first phase of the custody withdrawals or restoring access to Custody and, uh, I would just guess it’s gonna be sometime around November when that actually is approved and we’re able to flip the switch and turn things on. And then someone asked about rebranding. I certainly think so, but this is one of the many questions that needs to be answered.


ALEX MASHINSKY: Yeah, we would like the community to tell us if we should rebrand or not, so one of the things we - you know, the plan is to use uh CEL token much more heavily in kind of a governance, and these are the type of things that we would want people to vote - people at home, the CEL token to vote on. So those are the, you know, there will be many questions we’ll be asking the community going forward.


(*Alex presumably reading written questions*)


ALEX MASHINSKY: Focus on institutional clients? Again, I think unlike what you read everywhere, we have not seen institutional customers show up, so I think everyone who just focused on institutional had a hard time and anyone who focused on retail became one of the fastest growing companies in the US, so we don’t want to fix what’s not broken. Retail IS the story, we just need to stop doing the things that we didn’t do well - areas where we lost money or where we couldn’t execute well - and do more of the things that were done very well, right? Retail loans, right, they were all overcollateralized, right, we never had a problem there. Our customers loved that service.


Those are the things we want to continue doing. Emphasize staking, another example, custody, a big problem that exists out there, so those are core services that I think everybody needs, and we can easily build on top of that with additional things that we’re adding that we’re developing but they key, Oren said, is to basically reopen, return coins, allow people who want to withdraw to leave, to exit, we’re not going to try to keep people that don’t want to be with Celsius. We did have, I would say, probably at least half of our people using Celsius were not here for the mission. They were just here to take the coupon or the high yield or higher yield that Celsius was providing and that doesn’t mean we have to service them. A lot of these smaller accounts, we probably lost money on them because they were just not using loans or not using some of the services where we had income, right? So it’s definitely… we’re going to be much more focused and much more narrow, and I think it will be a better version of what we did in the first five years.


Ok, alright, so thank you everybody for your hard work. I know there’s a lot of stuff going on. A lot of requests, urgent stuff last minute, but just remember the three key things we’re doing: returning custody - that’s gonna happen before November, and then reopening the services and providing access for people for their coins.


You’ll see the plan, the go-forward plan, and the plan for providing access and basically, we want to get there as quickly as possible, but we want to get there organized. We want to use this time that we have now to fix a lot of the operational and other issues that we had. Migrate, for example, from spreadsheets to Snowflake and other systems that we’re building, so that we can automate a lot of the things that we’re using, and this is the time to do it, when we’re in this relatively sheltered place compared to what I think a lot of other people are going to go through. So again, I’ll see you next week. We’ll be doing this weekly going forward.


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