Ever since bankrupt crypto lender Celsius froze withdrawals in June, customer funds have been in limbo. now audio leak along with CNBC reveals their preliminary compensation plan.
The company wants to issue cryptocurrency “IOUs” to customers who have registered some of its accounts.
Record provided Tiffany Fong, who says she is one of 500,000 Celsius customers whose funds are blocked on the platform. Fong says she received the audio from a self-identifying employee who remained anonymous during the communication.
CNBC was unable to verify that the leaked audio was the entire exchange from the Sept. 1 internal meeting. However, CNBC spoke to former employees who confirmed the authenticity of the recording. In the audio, Chief Technology Officer Guillermo Bodnar says the plan is in the “early stages.” What is stated may have changed in the weeks following the call.
In the recording, Celsius co-founder Nuke Goldstein describes a compensation plan for customers who deposited assets into the Celsius “Earn” account, for which Celsius promised returns of up to 17%.
Goldstein said Celsius will issue “wrapped tokens” that will serve as long-term receipts for customers. Tokens represent the ratio between what Celsius owes customers and the assets they have. He said that if customers wait to redeem their tokens, there is a better chance that the gap between what Celsius has and what it owes will be smaller.
This is a risky bet to increase the value of a nascent token from a company that just went bankrupt. Goldstein said the price is likely to rise because Celsius is profiting from its mining business, the rate of ETH and other coins that can become liquid.
According to Goldstein, Celsius also intends to allow customers to redeem these tokens. He said the tokens can be exchanged for Celsius at a price probably less than they should be, or on crypto platforms like Uniswap, which allows the market to determine the value of the tokens.
In this photo illustration, the Celsius Network logo is displayed on a smartphone screen next to Bitcoin cryptocurrencies.
Rafael Enrique | Images of SOPA | Lightrocket | Getty Images
Compensation isn’t the only plan Celsius is working on. In part of the recording, which was released exclusively to CNBC, Bodnar said the company is also building a transaction management system that is designed to track the company’s assets on the blockchain. This will include the assets, the price at which they were purchased and what they were worth when sold.
Celsius, which said it manages billions of dollars in client assets, has never had sophisticated software to properly manage and track its assets, according to sources familiar with the company. Those sources, who asked not to be named because of privacy restrictions, also said the data was tracked manually in a simple Excel spreadsheet.
During the call, Bodnar said the goal of this new system is transparency.
“…[T]transparency is reflected not only in how we communicate, but also in ensuring that everything that is done on our platform is tracked, verified from end to end – we have nothing to hide,” he said.
Goldstein also emphasized that there is a lot of misinformation being spread about the company Twitter and that employees should rely only on information provided in court documents and town halls run by CEO Alex Mashynski.
“When you go on Twitter, bring an umbrella because it’s raining hard—-,” Goldstein said. “This is your opportunity to find out the truth. If we don’t tell you the truth about what we know, we will go to jail. Now I don’t know if we’re going to jail… but it’s not good.”
During the Q&A portion of the event, one questioner asked what staff expected to release blocked funds from the platform. Goldstein said employees will not take priority over customers.
“Employees are not the last and they are not the first,” Goldstein said. “You are also a customer. We are the customers. This means that we are on the same level as the customers.”
CNBC reached out to Celsius for comment on their compensation plan and the status of their transaction management system, but the company did not respond.
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