Thread by @realrephy

1 - My thoughts on the AST (asset share token) product #Celsius spoke about in court. We know it’s incomplete, so take what I say with a grain of salt.
@CelsiusUcc @SimonDixonTwitt @iTzAnthonyNap @camcrews @CelsiusLoans @Silkee_D @ThomasADiFiore @elveton101

Please continue…

2 - The idea is to cash out as many convenience class creditors as possible. To my understanding, Celsius is trying to cash out 60-70% of the creditors using a threshold b/w $2.5-5k claim. For creditors that are close to the final threshold announced, they may…

3 - have the option to forego a small portion of their claim for a quicker and higher % settlement. An assumption is the settlement process will be similar to the #voyager distribution method and convenience class creditors will receive an in-kind distribution based on…

4 - their USD valued claim at the time of C11 petition. That means the haircuts will vary from token to token upon distribution.

For the creditors that are above the convenience class threshold you will be offered an AST or asset share tokens (security token) in replace of…

5 - your USD valued claim on petition date. This token will represent equity in all of the newco’s assets (liquid/illiquid ) and newco will operate as a publicly traded company with all the accounting practices and regulatory compliance needed to operate a publicly traded…

6 - company. These tokens also will offer a variable or fixed dividend and the tokens can or will be publicly traded on the secondary market platforms. An example of a secondary market platform is: securitize.io

7 - To be clear, these tokens will not be traded on the NYSE or NASDAQ.

I think the tweets above are a good recap of what we know so far.

So, my personal take on this product with the information provided to date and being a member of the AST class is: If there are no other…

8 - options for recovery than to accept this AST then liquidation would be my vote. Hands down.

With that said, if there is optionality then there is room for discussion. How I see it possibly working is the following:

Creditor receives AST’s. Now the creditor wants to…

9 - have a CHOICE of what to do with these AST’s.

First option: The creditor can choose to redeem a portion of their AST’s for a haircut = to the convenience class that will be paid out from the bucket of liquid assets. This payout can be in USD or stables and…

10 - the AST used to redeem will be burned.

Second option: The creditor can remain to hold the AST and ride it out with appreciation and dividends to be made whole according to their USD valued claim. This can be a long option that can get the creditor back to 100% ONLY…

11 - of their claim. This means the AST can only ever get you back to 100% of your USD valued claim, no additional upside. In case of a newco bankruptcy, the AST class will be secured creditors to the debtors.

The final option for the creditor is to…

12 - swap their AST for a preferred equity token. This option would be good for newco b/c those funds will provide to newco additional liquidity to deploy and try to grow the business. If assets in the basket progress to an IPO stage then the preferred equity…

13 - token holders would capture all the upside. However, on the flip side, if newco goes bankrupt then those preferred equity tokens are worthless. Again, the AST used to swap will be burned.

I also believe that all of these transactions should happen in-app before there…

14 - is any listing on any of the secondary exchanges. This is due to the secondary markets not having liquidity like the NYSE or NASDAQ. The AST could very well plummet in value if they are listed immediately.

I believe creditors would like to have…

15 - a CHOICE for what to do with these tokens especially b/c we are not even talking anymore about a USD or in-kind recovery distribution and only an AST distribution in replace of our valuable digital assets.

If you made it to the end, Thank You.

Thoughts?