Kelvin, as a temperature scale, uses “absolute zero” as its baseline. That lowest conceived temperature would effectively stop all particle activity due to a lack of any semblance of energy. That point of temperature has never been achieved, but failed crypto firm Celsius seems to want to get as close as it can to “absolute zero” during this ongoing crypto winter.
The New York Times first reported Tuesday based on a recorded internal meeting that “Kelvin” is what bankrupt crypto lending firm Celsius wants to call its comeback company. In that recorded closed-door meeting held Sept. 8, firm executives told employees about a plan that would rebuild their enterprise in to a kind of crypto custody firm.
The recording was initially sent to the Times by Tiffany Fong, a Celsius customer and crypto YouTuber. Fong wrote that she received the recording from an anonymous source through an encrypted message, but included a full transcript of the meeting on her website. Through Twitter messages, Fong told Gizmodo she was holding her opinion on the meeting until a later date.
The meeting was led by CEO Alex Mashinsky and Oren Blonstein, the company’s head of innovation. Their reopening plans would essentially turn the firm into a crypto custody firm, acting as a kind of bank for users of crypto, while charging fees on transactions.
“We gave it a code name: Kelvin, absolute zero,” Mashinsky told gathered employees. “So we are planning to basically reopen with a process that does not require you to trust us in anything.”
Celsius did not immediately respond to Gizmodo’s request for comment. The company did not deny the veracity of the meeting transcript in a statement to the Times, with a spokesperson telling the paper they often hold preparatory internal meetings for multiple scenarios.
The company is trying to paint its current pains as just a moment of tragedy that will inevitably be overcome. In the meeting, Blonstein related their own experience to the archetypical story structure of the “Hero’s Journey,” or the Monomyth, saying that while they first find success they inevitably stumble “and have this dark moment.”
Getting out of that “supreme ordeal” point of the Monomyth cycle is earning back customer trust, according to Blonstein.
“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,” he said. “That principle of this being their property that we’re holding on their behalf means that they’re going to get it back.”
But as much as Celsius wishes to move on from the doldrums of bankruptcy and morale-crushing layoffs, it will still need to deal with investigations from 40 separate states’ financial regulatory agencies over the company halting withdrawals back in June. The company was left owing billions of dollars to its users after it closed the doors on accounts. Celsius once offered outlandish interest rates as high as 18% and boasted of its over 1 million customers.
Even as their company is being investigated by regulators and is being called out by past partners, Mashinsky reportedly compared themselves to brands like Delta Airlines and Pepsi, both of which went bankrupt at one point of their lifespans.
“We have an opportunity now to reorganize,” the CEO reportedly told gathered employees. “Pepsi filed for bankruptcy twice, right? Does it make the Pepsi taste less good? 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?”
Employees seem skeptical, according to the recording transcript. One employee asked why they were going this route when their previous business was centered on telling customers there were no transaction fees. Mashinsky responded that they were always planning to institute transaction fees, but they simply never had the chance.
Another employee reportedly asked: “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?” After a long talk about the current failures of crypto to solve even basic matters of crypto wallet key management, Mashinsky said “we’re going to reopen the things that we do best, again: custody, staking, [and] loans.”
Still, even this new idea for a company revival isn’t going to happen all at once. Mashinsky said they “should all be ready for a long winter,” but that they’re in a safe place with their Chapter 11 bankruptcy filing. The company has promised it is working on ways to reimburse “tens of thousands of Celsius customers.” The Celsius CEO said that part of their reopening plan is “returning the rest of the coins” though that will depend on getting consensus between equity holders.