Fahrenheit Consortium Wins Auction for Crypto Lender Celsius’ Assets

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Cryp­to con­sor­tium Fahren­heit, which includes Arring­ton Cap­i­tal and US Bit­coin Corp., won the bid to pur­chase the assets of insol­vent cryp­to lender Cel­sius, court fil­ings showed Thursday. 

Key Takeaways

  • Fahren­heit con­sor­tium won the auc­tion for assets of insol­vent cryp­to lender Celsius.
  • If the deal with Fahren­heit falls through for any rea­son, the Blockchain Recov­ery Invest­ment Con­sor­tium will be cho­sen as the back­up win­ner of the auction.
  • Orig­i­nal­ly, Cel­sius was to be pur­chased by cryp­to asset man­ag­er Novawulf before Fahren­heit and the Blockchain Recov­ery Invest­ment Con­sor­tium entered the bid­ding war.

Fahrenheit Wins Bidding War

Cel­sius filed for Chap­ter 11 bank­rupt­cy in July last year after not being able to keep up with cus­tomer’s redemp­tion requests, and as a part of the bank­rupt­cy process sought a buy­er via auc­tion to revive its cryp­to lend­ing and min­ing busi­ness­es in April 2023.

The Fahren­heit con­sor­tium won the three-way auc­tion, which also saw bids from Blockchain Recov­ery Invest­ment Com­mit­tee and cryp­to asset man­ag­er NovaWulf. 

Fahren­heit, led by Arring­ton Cap­i­tal and US Bit­coin Corp, will take con­trol of Cel­sius’s insti­tu­tion­al loan port­fo­lio, staked cryp­tocur­ren­cies, min­ing unit, and alter­na­tive invest­ments. The deal requires Fahren­heit to pay a $10 mil­lion deposit with­in three days to secure the agreement. 

While the bid has been accept­ed by Cel­sius and its cred­i­tors, reg­u­la­to­ry approval by the U.S. Bank­rupt­cy Court for the South­ern Dis­trict of New York is still pend­ing. If for some rea­son, Fahren­heit’s deal falls through, Blockchain Recov­ery Invest­ment Com­mit­tee, backed by Gem­i­ni Trust, VanEck, and oth­ers, will act as a backup. 

What Does This Mean For Former Celsius Customers?

This plan, if accept­ed by the court, pro­vides a path toward dis­burs­ing some of the plat­for­m’s liq­uid cryp­tocur­ren­cy to Cel­sius users.

The Fahren­heit con­sor­tium will also pro­vide the nec­es­sary cap­i­tal, man­age­ment team, and tech­nol­o­gy to estab­lish a new com­pa­ny called New­Co., which will be owned by Cel­sius’s cred­i­tors. Under this plan, Cel­sius account hold­ers effec­tive­ly own almost 100% of New­Co’s equi­ty, except for the por­tion that goes toward Fahren­heit’s man­age­ment fees.

The new enti­ty will also be over­seen by a board of direc­tors appoint­ed by Cel­sius cred­i­tors, and the new com­pa­ny will receive approx­i­mate­ly $450 to $500 mil­lion in liq­uid cryp­tocur­ren­cy and ben­e­fit from the con­struc­tion of a new 100-megawatt cryp­to min­ing facil­i­ty by US Bit­coin Corp.

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