KEY POINTS

  • Simon Dixon reportedly helped Bitfinex solve its problem in 2016
  • The help included support, security tokens, debt and equity
  • He says a "small portion of his total wealth" is invested in Celsius

Web3 investment firm BnktoTheFuture has announced its proposal to solve the situation Celsius is currently in and has said the only solution is a "financial innovation."

Simon Dixon, the co-founder of Celsius' lead investor BnkToTheFuture, proposed a nine-month recovery plan, which includes a "financial innovation" seemingly identical to the one it used to save Bitfinex from liquidation in 2016 when it was hacked and lost 120,000 BTC or approximately $72 million of users' money.

At the time, the web3 investment firm helped Bitfinex and "supported them and executed a recovery that involved security tokens, debt and equity and gave investors a very high return for the high risk they took."

Celsius Network logo and representations of cryptocurrencies are seen in this illustration taken, June 13, 2022.
Celsius Network logo and representations of cryptocurrencies are seen in this illustration taken, June 13, 2022. Reuters / DADO RUVIC

The executive said: "I believe traditional finance will not have a timely solution for Celsius as we saw in the past with Mt. Gox that still remains unresolved 10 years later. I believe that this can only be solved with a solution using financial innovation as we did with Bitfinex that was resolved within 9 months and worked out very well for depositors."

Unfortunately, he did not reveal the details of the recovery plan saying it is not his place to divulge anything before Celsius made the announcement. "It’s my position to offer solutions as we have the experience, licenses and technology to do so," Dixon added.

Interestingly, Dixon revealed that a "small portion of his total wealth" is invested in Celsius, making him personally exposed to possible insolvency. However, he claimed that he is "more concerned for community members that may have a chance at preserving a larger percentage of their wealth through a recovery plus an education in risk management."

He also said that the cryptocurrency "industry has come back stronger from every disaster and now is the time for us to offer support in a bottom-up way in compliance with the regulations we have always followed."

In 2016, Bitfinex did not pursue any liquidation proceedings and instead came up with an innovative recovery plan. This includes the promise to repay users using BFX tokens equivalent to the value of money they lost because of the breach.

BankToTheFuture eventually introduced a solution by working with Bitfinex to enable users to convert their BFX tokens into the company's equity. Celsius has yet to reveal the recovery plan proposed by the Web3 investment firm.

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