3 - 5 minute read
Two consortiums, Fahrenheit and Blockchain Recovery Investment Committee, are set to bid for the assets of bankrupt crypto lender Celsius Network in an auction scheduled for April 25 in New York. Crypto exchanges Coinbase and Gemini are among the companies participating in the bids. Fahrenheit is backed by venture capital firm Arrington Capital, which is owned by blockchain investor Michael Arrington. Other participants in the consortium are Proof Group Capital Management, former Algorand CEO Steven Kokinos, and investment banker Ravi Kaza. The Blockchain Recovery Investment Committee, on the other hand, is backed by crypto exchange Gemini, fund manager VanEck, Bitcoin mining firm Global X Digital, and Plutus Lending.
The first bidder for Celsius Network assets was NovaWulf Digital Management, which set the bar for the other bidders. Customers are expected to recover up to 70% of their funds under NovaWulf’s proposal, which includes a direct cash contribution in the range of $45 million to $55 million, as well as the creation of a new public platform fully owned by Celsius creditors.
Based on Arrington’s tweets, the Fahrenheit consortium also proposes the creation of a new company “with the sole goal of growing those assets to make stakeholders whole.” The new company will be run by “a group of proven crypto operators”, and hold substantial bitcoin mining assets, retail and institutional loans, a variety of crypto core assets, and a venture capital portfolio, said Arrington.
The auction is a major step for Celsius’ customers to recover their funds. The company filed for Chapter 11 bankruptcy in July 2022, after halting withdrawals citing “extreme market conditions” and rumors of insolvency. The participation of major players like Coinbase and Gemini in the auction shows the growing interest of established players in the crypto space.
According to a report from the Financial Times, Michael Arrington mentioned Coinbase as one of the companies backing the Fahrenheit consortium in a series of Tweets on April 22. However, the tweet was later deleted, and Coinbase declined to comment.
Traders should keep a close eye on the outcome of the auction, as it could have a significant impact on the crypto market. The participation of major players like Coinbase and Gemini shows that established players are interested in the crypto space, and the creation of a new company with a focus on growing crypto assets could lead to increased investment in the sector. However, traders should also be aware of the risks involved in investing in bankrupt companies.
The Bottom Line: The auction for Celsius Network assets, with two consortiums disputing the assets, shows the growing interest of established players in the crypto space. The creation of a new company with a focus on growing crypto assets could lead to increased investment in the sector, but traders should also be aware of the risks involved in investing in bankrupt companies.