OPNX explains why Celsius was prioritized over FTX, others for bankruptcy tokenization Samuel Wan · 2 hours ago · 2 min read
OPNX opted to launch bankruptcy tokenization with Celsius claims first because the company’s information was easily accessible.
2 min read
Updated: May 26, 2023 at 4:25 pm
Cover art/illustration via CryptoSlate
Celsius was selected first for OPNX’s bankruptcy tokenization due to the company’s “completely unredacted database,” according to Heimdall CEO Vishal Shah.
Heimdall, a provider of business tokenization solutions, and OPNX partnered to roll out their bankruptcy tokenization product, enabling users with funds frozen on defunct platforms to access liquidity.
The product provides an alternative to the lengthy bankruptcy administration process, which can take many years to resolve.
For example, eight years after Mt. Gox went under, the creditors have yet to receive payment – a situation made all the more frustrating due to continual changes in the repayment schedule.
On May 24, OPNX co-founder Mark Lamb and Shah announced Celsius users could tokenize their bankruptcy claims soon after May 29.
OPNX goes with Celsius first
In an update to the launch, Shah explained that Celsius’s claims were chosen first due to the accessibility of the company’s database of information.
The Heimdall CEO said their objective is to introduce a tech layer and digitize the antiquated bankruptcy process. But doing that requires data.
Out of the many crypto bankruptcies that occurred in 2022, it happens that Celsius data is readily available, making the digitization process “very easy” to deal with, Shah said, adding:
“Celsius has a completely unredacted database, so it’s very easy to mine that information, parse it in the way you need and make sense of it to work towards a seamless validation.”
In addition, Shah said it’s not a small estate either, with approximately 600,000 creditors, 85% of which are categorized as “convenience class,” making Celsius a “hand in glove” choice to go with first.
“It resonates with the ethos that we’re trying to build something that assists those that were unfairly exposed.”
Under Chapter 11 bankruptcy rules, a convenience class refers to a classification of unsecured creditors owed less than a threshold determined by the court.
By designating different classes of creditors, the administrative burden on the court is eased compared to if all claims were treated the same, regardless of whether they are big, small, secured, or unsecured.
Source : CryptoSlate