Celsius is not defeated yet. The troubled lending service issued a new statement yesterday, Sunday, June 19, in which the company is combative. The press release, which is rather sparsely filled with information, states:
We want our community to know that our goal remains to stabilize our liquidity and operations. This process will take time.
Support for the repair process also comes from within the crypto sector itself. Because in a blog post announces the fintech investor Bank to the Future a kind of bailout for Celsius. In it, CEO Simon Dixon writes that he is “very interested in supporting Celsius with a rescue plan.”
Exactly how this is supposed to happen is still unclear. But orientation should be the rescue of Bitfinex from the year 2016. At that time, Bnk to the Future was able to recover almost all lost customer funds using the BFX Security Token.
Victims of the 120,000 BTC hack received BFX in the amount of their loss and could either sell them later on the open market with speculative profits, or have Bitfinex pay out the equivalent of one US dollar.
The rescue was actually successful and Bitfinex was able to pull its head out of the noose.
CEL short squeeze
Meanwhile, a support movement for Celsius is also forming from the community. Just like the subreddit r/wallstreetbets Celsius fans are currently buying massive CEL tokens to provoke a short squeeze. According to the initiators of the action, large financial institutions have built up massive short positions of CEL tokens, betting on the collapse of the ecosystem.
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But instead of trending zero, CEL has actually trended north on several occasions over the past seven days.
This, in turn, puts the CEL bears in an awkward position. After all, shorts are made up of borrowed capital that must eventually be repaid. If the bet goes wrong, the short seller has to buy back the tokens at a higher price and thus incurs large losses. In the case of CEL, it becomes problematic for the short sellers, mainly because the CEL market has literally dried up that day and the tokens are therefore only sold over the counter for a high surcharge.
According to an unconfirmed Twitter thread should the institutional crypto trader Alameda Research be one of the leading CEL short sellers. The company has not yet responded to a press inquiry from BTC-ECHO.
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