Reports by court filings published on Thursday, Cryptocurrency Consortium Celsius Network LLC has won the bid to acquire bankrupt cryptocurrency lender Celsius Network LLC Network.
The Fahrenheit consortium beat fellow bidder NovaWulf, with the Blockchain Tech Recovery Investment Consortium shortlisted as a backup.
Fahrenheit’s Successful Bid
Reports by court filings, Celsius Network LLC Network’s assets were previously valued at $2 billion. Fahrenheit’s winning consortium is backed by Arrington Financial resources, mining company United States Bitcoin (BTC) Corp, Steven Kokinos, Ravi Kaza, and Proof Group. With the bid secured, the consortium will acquire Celsius’s staked digital currencies, along with its institutional loan portfolio, mining unit, and additional alternative investments. In addition, the consortium must pay a deposit of $10 Million within 3 days to clinch the deal. Fahrenheit will likewise be required to provide the management team, financial resources, and technology to set up and operate the new regulatorily compliant public company.
The deal will likewise see the newly formed company receive a whole lot of amount of liquid digital currency. This amount is speculated to be betwixt $450 and $500 Million. United States Bitcoin (BTC) Corp will likewise lead the construction of numerous Bitcoin (BTC) mining facilities, including a 100-megawatt plant. In an notice, 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 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.”
They further added,
“The dynamic involvement 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
Although 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 Network LLC, similar to how it had scuppered a similar deal. For context, the Judge was referring to the agreement betwixt Binance Crypto exchange United States and Voyager. After Federal officials opposed the deal, Binance Crypto exchange United States had to terminate its buy of bankrupt cryptocurrency lender Voyager’s $1 Billion in assets. Binance Crypto exchange cited an uncertain and hostile regulatory climate for scuppering the deal.
Celsius Network LLC and BRIC
Celsius had filed for Chapter 11 bankruptcy in July 2022 after it resurfaced that the lender had a $1.2 Billion hole in its balance sheet. At the beginning, digital investment financing company Novawulf was announced as the winning bidder but sooner or thereafter lost out. Nonetheless, Celsius Network LLC likewise announced that it had secured a backup bid from the Blockchain Tech Recovery Investment Consortium (BRIC). The backup would act as a contingency strategy should there be any hiccups. Celsius Network LLC announced the backup bid on its Twitter handle, stating,
“Earlier today, the Celsius Network LLC auction concluded, and Fahrenheit was chosen as the winning bid. The BRIC bid was chosen as the backup bid. The Committee appreciates the efforts of Celsius Network LLC and all bidders for their efforts, which generated whole lot of value for Celsius Network LLC 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 set up a publicly traded mining business, giving Celsius Network LLC creditors complete ownership of equity interests and a potential management contract with GlobalXDigital.