How much would you need to be paid to keep working at a bankrupt crypto lender?
Workers at Celsius Network are now finding out, after the firm, which filed for Chapter 11 bankruptcy in July, asked and received approval from a bankruptcy court judge to hand out $2.8 million in bonuses, Bloomberg reported.
This was the second attempt by Celsius, which sought court protection after suffering a liquidity crash in June due to plunging crypto values, to get court approval for the bonuses. The same judge previously ruled against it because the company didn’t provide enough information regarding the payments.
Celsius froze all transactions and withdrawals across its network when it filed for bankruptcy, owing its customers around $4.7 billion.
The bonus payments will only go to the non-executive employees who are working to keep Celsius afloat as it attempts to exit bankruptcy as a going concern. The payments are set to be less than $75,000, with the only employees eligible being those with salaries ranging from $25,000 to $425,000.
A number of employees chose to leave Celsius after it filed for bankruptcy. During the court hearing, the crypto lender’s lawyer said roughly 170 employees are left, down from 370 before.
“We’re getting really down to the nub of what we need to continue to function,” the company’s lawyer said, Bloomberg reported.
Celsius is expected to file a restructuring plan by Feb. 15.
“We intend to use this time to continue developing a plan for a standalone business, as we explore all value maximizing opportunities available to us, for the benefit of our customers and other stakeholders,” Celsius tweeted on Monday.
Before its crash, Celsius’s business model essentially used customer deposits to fund its own investments and cover loans it made to users—and in return users were paid huge interest rates, as much as 30%. And because of that, it was one of the largest crypto lending platforms, attracting more than 2 million users and managing billions of dollars in assets.
And it’s a lack of regulation that allows crypto firms to do this. In a lawsuit filed by KeyFi, Jason Stone claimed Celsius was a Ponzi scheme. The same has been said about Sam Bankman-Fried and FTX, the recently collapsed crypto exchange—in that both Celsuis and FTX, arguably, drew in investors with the promise of high return.
Celsius did not immediately respond to Coins2Day’s request for comment.
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