Cryptocurrency Consortium Celsius has won a bid to acquire bankrupt cryptocurrency lender Celsius Network, according to court documents released Thursday.
The Fahrenheit consortium defeated bidder NovaWulf, with the Blockchain Recovery Investment Consortium shortlisted as a backup.
Fahrenheit won the bid
Celsius Network’s assets were previously worth $2 billion, according to court documents. Fahrenheit’s winning consortium was backed by Arrington Capital, mining firm US Bitcoin Corp, Steven Kokinos, Ravi Kaza and Proof Group. Following the winning bid, the consortium will acquire Celsius’s collateralized cryptocurrency, as well as its institutional lending portfolio, mining arm and other alternative investments. In addition, the consortium must pay a $10 million deposit within three days to complete the deal. Fahrenheit will also be required to provide the management team, capital and technology to establish and operate the new compliant listed company.
The deal will also give the newly formed company access to a large amount of liquid cryptocurrency. The amount is speculated to be between $45 billion and $500 million. US Bitcoin Corporation will also lead the construction of numerous bitcoin mining facilities, including a 100-megawatt plant. In the announcement, board special committee members Alan Carr and David Barse said,
“We are very pleased that our competitive auction process has yielded positive results for our clients, most notably saving hundreds of millions of dollars in administrative fees and increasing the distribution of liquid cryptocurrencies to Celsius clients. We thank Celsius The platform has received strong interest from bidders and looks forward to working with Fahrenheit to expedite the restructuring and distribute the recovery to creditors.”
They further added,
“Active participation in our auction has provided us with an excellent option to exit Chapter 11. We appreciate the committee’s cooperation and now that our path is set, we look forward to enabling our clients to move forward from this process”
pending regulatory approval
Although Celsius and its committee of creditors have accepted the bid, it still needs regulatory approval before it can be finalized. Bankruptcy Court Judge Martin Glenn has already warned that regulatory hurdles could stymie the Celsius takeover in the same way it has scuttled similar deals. For context, the judge was referring to the agreement between Binance US and Voyager. Binance US had to end its acquisition of $1 billion in assets from bankrupt cryptocurrency lender Voyager after federal officials objected to the deal. Binance cited an uncertain and hostile regulatory environment as a deal breaker.
Celsius and the BRICs
Celsius filed for Chapter 11 bankruptcy protection in July 2022 after discovering a $1.2 billion hole in the lender’s balance sheet. Initially, Crypto asset investment firm Novawulf was announced as the winning bidder, but was ultimately unsuccessful. However, Celsius also announced that it has secured an alternate bid from the Blockchain Recovery Investment Coalition (BRIC). Backups are there as a contingency plan should anything go wrong. Celsius announced the alternate bid on its Twitter handle, noting,
“Earlier today, the Celsius degrees auction closed and Fahrenheit was selected as the winning bidder. The BRIC bid was selected as the backup bid. The committee thanks Celsius and all bidders for their efforts, which have delivered tremendous value to Celsius users . The Commission will share more information on the winning and alternate bids shortly.”
If BRIC had to step in, it would need to set up a publicly traded mining operation with full equity ownership by Celsius creditors and a potential management contract with GlobalXDigital.
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