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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  1. U.S. Bankruptcy Court Southern District of New York. “Memorandum Opinion and Order Regarding Ownership of Earn Account Assets."

  2. Businesswire. "Celsius Announces Fahrenheit, LLC as Winning Bidder to Manage New Entity to Be Owned by Celsius Creditors."

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