Heimdall, a provider of business tokenization solutions, has partnered with OPNX to introduce a bankruptcy tokenization product. The product will allow users to access liquidity even if their funds are frozen on defunct platforms. The bankruptcy tokenization provides an alternative to the lengthy bankruptcy administration process that can take years to resolve.
Why Celsius was Chosen First?
Celsius has been chosen as the first platform for bankruptcy tokenization. The CEO of Heimdall, Vishal Shah, explained that Celsius’s claims were chosen first due to their “completely unredacted database” that contains all necessary information. The objective of this partnership is to digitize and introduce a tech layer to the antiquated bankruptcy process, which requires data.
Shah added that out of the many crypto bankruptcies that occurred in 2022, Celsius’s data is readily available, making the digitization process “very easy” to deal with. Celsius has approximately 600,000 creditors, 85% of which are categorized as “convenience class,” making it a “hand in glove” choice to go with first.
What is Convenience Class?
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.
How Does the Product Work?
The bankruptcy tokenization product works by digitizing the bankruptcy process using data from the frozen platform. Users can tokenize their bankruptcy claims, enabling them to access liquidity without having to wait for the lengthy administration process. The product aims to assist those unfairly exposed and provide an alternative to the frustrating process that can take years to resolve.
Heimdall and OPNX’s partnership is a significant step towards improving the bankruptcy process and providing a solution to the frustration of waiting years to access funds. The bankruptcy tokenization product will digitize the process and use data from the frozen platform to allow users to access liquidity seamlessly. By choosing Celsius as the first platform, the partnership aims to assist those unfairly exposed and introduce a tech layer to the antiquated bankruptcy process, which requires data.