According to court filings published on Thursday, Crypto Consortium Celsius has won the bid to acquire bankrupt crypto lender Celsius Network.
The Fahrenheit consortium beat fellow bidder NovaWulf, with the Blockchain Recovery Investment Consortium shortlisted as a backup.
Fahrenheit’s Successful Bid
According to court filings, Celsius Network’s assets were previously valued at $2 billion. Fahrenheit’s winning consortium is backed by Arrington Capital, mining company US Bitcoin Corp, Steven Kokinos, Ravi Kaza, and Proof Group. With the bid secured, the consortium will acquire Celsius’s staked cryptocurrencies, along with its institutional loan portfolio, mining unit, and additional alternative investments. Additionally, the consortium must pay a deposit of $10 million within three days to clinch the deal. Fahrenheit will also be required to provide the management team, capital, and technology to establish and operate the new regulatorily compliant public company.
The deal will also see the newly formed company receive a significant amount of liquid cryptocurrency. This amount is speculated to be between $450 and $500 million. US Bitcoin Corp will also lead the construction of numerous Bitcoin mining facilities, including a 100-megawatt plant. In an announcement, Alan Carr and David Barse, members of the Special Committee of the Board, stated,
“We are very pleased that our competitive auction process produced a positive result for customers, including, most prominently, hundreds of millions of dollars in lower management fee savings and increased liquid cryptocurrency distributions to Celsius’ customers. We appreciate the robust interest that the Celsius platform has received from competing bidders and look forward to working with Fahrenheit to expedite the restructuring and distribute recoveries to creditors.”
They further added,
“The dynamic engagement in our auction provided us with excellent options for our exit from chapter 11. We are grateful for the collaboration of the Committee, and with our path now set, we are looking forward to enabling our customers to move forward from this process.”
Regulatory Approval Awaited
While the bid has been accepted by Celsius and a committee of its creditors, it still requires regulatory approval before it can be finalized. Martin Glenn, the Bankruptcy Court Judge, had already warned of regulatory roadblocks that could hamper the acquisition of Celsius, similar to how it had scuppered a similar deal. For context, the Judge was referring to the agreement between Binance US and Voyager. After Federal officials opposed the deal, Binance US had to terminate its purchase of bankrupt crypto lender Voyager’s $1 billion in assets. Binance cited an uncertain and hostile regulatory climate for scuppering the deal.
Celsius and BRIC
Celsius had filed for Chapter 11 bankruptcy in July 2022 after it emerged that the lender had a $1.2 billion hole in its balance sheet. Initially, digital asset investment firm Novawulf was announced as the winning bidder but eventually lost out. However, Celsius also announced that it had secured a backup bid from the Blockchain Recovery Investment Consortium (BRIC). The backup would act as a contingency plan should there be any hiccups. Celsius announced the backup bid on its Twitter handle, stating,
“Earlier today, the Celsius auction concluded, and Fahrenheit was selected as the winning bid. The BRIC bid was selected as the backup bid. The Committee appreciates the efforts of Celsius and all bidders for their efforts, which generated significant value for Celsius users. The Committee will share more info a lot about the winning bid and backup bid soon.”
In the event of BRIC having to step in, it would be required to establish a publicly traded mining business, giving Celsius creditors complete ownership of equity interests and a potential management contract with GlobalXDigital.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.