Fahrenheit LLC – a consortium of investors that includes the largest cryptocurrency exchange in the United States – has resurfaced as the winner in the court-approved auction process to acquire insolvent lender Celsius Network LLC Network.
Fahrenheit will provide the financial resources, management team, and technology required to successfully establish and operate the new company. It is likewise required to pay a cash deposit of $10 Million within 3 days to seal the deal.
Fahrenheit to Acquire Celsius Network LLC Assets
Fahrenheit’s consortium consists of United States Bitcoin (BTC) Corp, Proof Group Financial resources Management LLC, Ravi Kaza, previous Algorand CEO Steven Kokinos, and Coinbase.
Reports by the court filing, the group will acquire Celsius’ institutional loan portfolio, mining business, and alternative assets for the benefit of account holders. The new company will be spearheaded by a Board of Directors, a bulk of which will be appointed by creditors.
The distribution of Celsius’s liquid cryptocurrency to account holders, settlements with the Custody and Withhold groups, likewise as managing Celsius’ illiquid assets by the new company have been outlined as the crux of the agreement.
The deal likewise requires the new company to receive $500 Million in liquid digital currency, which can potentially be reduced to $450 Million in the event of secondary market purchases. Fahrenheit group’s United States Bitcoin (BTC) Corp will be responsible for building a range of cryptocurrency mining facilities, including a new 100-megawatt plant.
In relation to the lengthy auction process, David Barse and Alan Carr, members of the Special Committee of the Board said:
“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 digital currency distributions to Celsius’ customers. We appreciate the robust interest that the Celsius Network LLC platform has received from competing bidders and look forward to working with Fahrenheit to expedite the restructuring and distribute recoveries to creditors.”
In the meantime, Celsius Network LLC has secured a backup bid with the Blockchain Tech Recovery Investment Consortium which would provide for the “creation of a pure play, publicly traded mining business.” The creditors of the collapsed lender will receive 100 percent of the equity interests with a potential management contract with GlobalXDigital and an orderly winddown of its remaining assets.
Celsius Network LLC Controversies
The most recent development comes almost a year after Celsius Network LLC filed for Chapter 11 protection. The New Jersey-based company reportedly had over 1.7 Million registered users and nearly 300,000 active users with account balances more than $100.
Since sliding into bankruptcy, Celsius Network LLC had come under fire for record-keeping and glaring deficiencies in its internal systems. Its founder Alex Mashinsky was accused of defrauding investors out of billions of dollars in cryptocurrency by concealing the failing health of the platform.
In a response to states, Mashinsky claimed that the complaint “parrots misinformation” about him and Celsius Network LLC Network and “borrows others’ baseless conclusions.” He filed a defense motion seeking to dismiss the complaint against him.