Bankrupt cryptocurrency lender Celsius Network LLC has selected Fahrenheit as the winning bid, which will provide funding and a team to run a new company.
Fahrenheit, a group of cryptocurrency firms, was selected as the winning bidder on Thursday morning, according to a press release.
The Blockchain Recovery Investment Consortium (BRIC) was selected as an alternate bid.
“The committee thanks Celsius and all bidders for their efforts that have delivered tremendous value to Celsius users,” the official committee of Celsius Unsecured Creditors tweeted.
Celsius filed for bankruptcy last July, and New York regulators later sued Celsius’s former CEO, Alex Mashinsky, for allegedly lying to investors about the company’s “dire financial situation.”
What is the plan?
According to the press release, Fahrenheit will create and operate a new company called NewCo, which will manage Celsius’ illiquid assets, including its mining operations.
“Under the plan, Celsius account holders will own 100% of the new equity in NewCo (subject to the dilution of the equity being distributed to Fahrenheit as a management fee),” Celsius said.
A new board, most of which will be appointed by creditors, will oversee NewCo, the statement said.
NewCo’s assets will include $500 million in liquid cryptocurrencies, DeFi crypto assets, private equity and venture fund investments, mining, and more.
“Over the next few weeks, Celsius intends to negotiate with Fahrenheit and publicly file a plan sponsor agreement, an alternate plan sponsor agreement with BRIC, a revised Chapter 11 plan and a disclosure statement, All of this is still subject to bankruptcy court approval,” Celsius said.
Fahrenheit is made up of mining company US Bitcoin Corp., Crypto asset investment firm Arrington Capital, Proof Group, cryptocurrency entrepreneurs Steven Kokinos and Ravi Kaza.
Celsius originally reached an agreement with NovaWulf Digital Management in February to buy the company’s lending business.
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