Two new consortiums will dispute the assets of bankrupt crypto lender Celsius Network in an auction scheduled for April 25 in New York.
Two new consortiums will dispute the assets of bankrupt crypto lender Celsius Network in an auction scheduled for April 25 in New York. According to reports and court filings, crypto exchanges Gemini and Coinbase are among the companies participating in the bids.
Court documents show that one of the consortiums is Fahrenheit, backed by venture capital firm Arrington Capital, which is owned by blockchain investor Michael Arrington. Other participants in the consortium are Proof Group Capital Management, former Algorand CEO Steven Kokinos and investment banker Ravi Kaza.
Arrington mentioned that Coinbase was one of the companies backing the Fahrenheit consortium in a since-deleted tweet on April 22, according to a report from Fortune. Coinbase declined to issue a comment to the publication.
The second group bidding for Celsius assets is the Blockchain Recovery Investment Committee, backed by crypto exchange Gemini, fund manager VanEck, Bitcoin (BTC) mining firm Global X Digital and Plutus Lending.
Both consortiums are disputing the assets with NovaWulf Digital Management, the “stalking horse bidder” — a term used to describe the first bidder of a bankrupt company that sets the bar for the other bidders. NovaWulf’s proposal includes a direct cash contribution in the range of $45 million to $55 million, as well as the creation of a new public platform wholly owned by Celsius creditors. Customers are expected to recover up to 70% of their funds under NovaWulf’s proposal.
Based on Arrington’s tweets, the Fahrenheit consortium also proposes the creation of a new company “with the sole goal of growing those assets to make stakeholders whole.” The company would be run by “a group of proven crypto operators” and hold “substantial bitcoin mining assets, retail and institutional loans, a variety of crypto core assets, and a venture capital portfolio,” said Arrington.
The auction is a major step for Celsius’ customers to recover their funds. The company filed for Chapter 11 bankruptcy in July 2022 after halting withdrawals, citing “extreme market conditions” amid rumors of its insolvency.
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