Crypto Fahrenheit Consortium Wins Bid to Acquire Bankrupt Celsius Assets

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Crypto consortium Fahrenheit has become the winning bidder in the acquisition of insolvent lender Celsius Network, court documents released Thursday revealed.

The consortium, backed by mining firm US Bitcoin Corp., Arrington Capital, Proof Group, Steven Kokinos and Ravi Kaza, will take ownership of Celsius’ institutional loan portfolio, staked crypto assets, the companies’ Bitcoin mining unit and Other Cryptocurrency-Related Investments. .

Fahrenheit will also provide the capital, management team and technology necessary to establish and operate the new regulatory-compliant public company.

As part of the deal, the newly formed company will receive a substantial amount of liquid cryptocurrency, estimated at between $450 million and $500 million. Additionally, US Bitcoin Corp will lead the construction of various Bitcoin mining facilities, including a 100 megawatt factory.

We are very pleased that our competitive bidding process has produced a positive outcome for clients, including hundreds of millions of dollars in management fee savings and increased cash cryptocurrency distributions to Celsius clients. David Barse and Alan Carr, members of the Board’s Special Committee, said in a statement.

Barse and Carr added that the agreement provides excellent options for our exit from Chapter 11, and with the path now set, we look forward to enabling our customers to move forward with this process.

Celsius and Fahrenheit did not immediately respond to Decrypt’s request for comment.

Backup plan

Celsius entered Chapter 11 bankruptcy in July last year, with a hole in its balance sheet of around $1.2 billion revealed by the bankruptcy court soon after, and has since been trying to offer a restructuring plan.

Digital asset investment firm Novawulf was announced as the winning bidder for Celsius’ troubled assets in February this year, but ultimately lost the race.

To finalize the deal, which must also be approved by the U.S. Bankruptcy Court for the Southern District of New York, Fahrenheit must make a $10 million deposit within three days, according to court documents.

Additionally, the company announced that it has secured a relief offer from the Blockchain Recovery Investment Consortium (BRIC) which serves as a contingency plan and would come into play if needed for any reason.

The committee will share more information about the winning bid and the backup bid soon. You can read more details about the auction here: https://t.co/8tK2e2oOzW

Celsius Official Unsecured Creditors Committee (@CelsiusUcc) May 25, 2023

In such a scenario, BRIC would establish a publicly traded mining company where Celsius creditors would receive full ownership of the stakes, as well as a potential management contract with GlobalXDigital.

In the coming weeks, Celsius plans to enter into negotiations and publicly file several important documents, subject to bankruptcy court approval.

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