The assets of Celsius, a crypto lender facing insolvency, were secured by the Fahrenheit consortium through a successful auction. In the event of any complications leading to the cancellation of the deal with Fahrenheit, the Blockchain Recovery Investment Consortium will be selected as the alternate winner of the auction. Initially, the plan was for crypto asset manager Novawulf to acquire Celsius until Fahrenheit and the Blockchain Recovery Investment Consortium engaged in a competitive bidding process.
Fahrenheit Consortium Wins Auction for Crypto Lender Celsius’ Assets
In July of the previous year, Celsius filed for Chapter 11 bankruptcy due to its inability to meet customer redemption requests. As part of the bankruptcy proceedings, Celsius initiated an auction in April 2023 to find a buyer and revive its crypto lending and mining operations.
The auction attracted three participants: the Fahrenheit consortium, the Blockchain Recovery Investment Committee, and crypto asset manager NovaWulf. Ultimately, the Fahrenheit consortium, led by Arrington Capital and US Bitcoin Corp, emerged as the winning bidder.
Under the agreement, Fahrenheit will assume control of Celsius’s institutional loan portfolio, staked cryptocurrencies, mining unit, and alternative investments. To secure the deal, Fahrenheit is required to submit a $10 million deposit within three days.
While the bid has been accepted by Celsius and its creditors, regulatory approval from the U.S. Bankruptcy Court for the Southern District of New York is still pending. In the event that Fahrenheit’s agreement encounters any issues, the Blockchain Recovery Investment Committee, backed by Gemini Trust, VanEck, and other entities, will serve as a backup option.
What Does This Mean For Former Celsius Customers?
If approved by the court, this proposal presents a viable way to distribute a portion of Celsius’s liquid cryptocurrency to its users. Additionally, the Fahrenheit consortium will contribute the necessary funding, management expertise, and technology to establish a new company called NewCo., which will be owned by Celsius’s creditors.
As per this plan, Celsius account holders will effectively hold nearly 100% of NewCo’s equity, with the exception of a portion designated for Fahrenheit’s management fees.
The operations of the new entity will be overseen by a board of directors appointed by Celsius’s creditors. Moreover, the new company will receive an estimated $450 to $500 million in liquid cryptocurrency and will benefit from the construction of a new 100-megawatt crypto mining facility by US Bitcoin Corp.
Celsius Network LLC, a cryptocurrency lending company headquartered in Hoboken, New Jersey, was declared bankrupt. The company had offices in multiple countries and operated globally. Users had the option to deposit various types of cryptocurrencies, such as Bitcoin and Ethereum, into a Celsius wallet to earn interest, and they could also secure loans by using their cryptocurrencies as collateral. By May 2022, the company had lent $8 billion to clients and managed nearly $12 billion in assets.
In June 2022, the company attracted attention when it halted all transfers and withdrawals indefinitely, citing “extreme market conditions.” This caused significant drops in the prices of bitcoin and other cryptocurrencies. Subsequently, on July 13, 2022, Celsius filed for Chapter 11 bankruptcy.
About US Bitcoin Corp.
US Bitcoin Corp (US BTC) is dedicated to constructing and managing data centers that safeguard the Bitcoin network. With a focus on responsibility, efficiency, and cutting-edge technology, US BTC strives to become the leading digital asset mining operation in North America.
Mining Infrastructure Operations of US Bitcoin Corp:
US Mining Infrastructure Operations (USMIO) is the preferred strategic operator for owners of bitcoin mines who aim to maximize the complete potential of their portfolio of sites. The company offer unparalleled value to our partners by utilizing top-notch operating technology, stringent operational standards, and an unwavering dedication to generating significant bottom-line results.
The USMIO team effectively oversees a total capacity of 680 MW across three locations in Texas and Nebraska, employing a combination of self-mining and hosting operations. The company’s esteemed partners consist of a prominent institutional investor concentrating on renewable energy assets, as well as one of the largest producers of renewable energy worldwide.
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