Crypto consortium Fahrenheit, which includes Arrington Capital and US Bitcoin Corp., has won the bid to buy the assets of insolvent crypto lender Celsius, court documents showed Thursday.
key takeaways
- The Fahrenheit Consortium won the auction for assets of insolvent crypto lender Celsius.
- If the deal with Fahrenheit fails for any reason, the Blockchain Recovery Investment Consortium will be chosen as the back-up winner of the auction.
- Celsius was originally going to be bought by crypto asset manager Novawulf before Fahrenheit and the Blockchain Recovery Investment Consortium entered the bidding war.
Fahrenheit wins the bidding war
Celsius requested Chapter 11 bankruptcy in July of last year after not being able to keep up customer redemption requestsand as part of the bankruptcy process, it sought a buyer through an auction to reactivate its crypto-credit and mining businesses in April 2023.
The Fahrenheit Consortium won the tripartite auction, which also included bids from the Blockchain Recovery Investment Committee and crypto asset manager NovaWulf.
Fahrenheit, led by Arrington Capital and US Bitcoin Corp, will take control of Celsius' institutional loan portfolio, staked cryptocurrency, mining unit, and alternative investments. The deal requires Fahrenheit to pay a $10 million deposit within three days to secure the deal.
While the offer has been accepted by Celsius and its creditors, regulatory approval by the US Bankruptcy Court for the Southern District of New York is still pending. If for any reason, the Fahrenheit deal falls through, the Blockchain Recovery Investment Committee, backed by Gemini Trust, VanEck and others, will act as backup.
What does this mean for former Celsius customers?
This plan, if accepted by the court, provides a path to disburse some of the platform's liquid cryptocurrency to Celsius users.
The Fahrenheit consortium will also provide the necessary capital, management equipment and technology to establish a new company called NewCo., which will be owned by Celsius creditors. Under this plan, Celsius account holders effectively own nearly 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's creditors, and the new company will receive between $450 and $500 million in liquid cryptocurrency and will benefit from the construction of a new 100-megawatt crypto mining facility by US Bitcoin. Corp.
