Fahrenheit Successfully Acquires Assets of Crypto Lender Celsius Following Bid

Court Filings Reveal Fahrenheit as Successful Bidder

Court filings have revealed that cryptocurrency consortium Fahrenheit emerged as the successful bidder to acquire insolvent crypto lender Celsius Network. The acquisition involves Celsius assets previously valued at approximately $2 billion.

Asset Acquisition Details

The court filings, submitted in the early hours of May 25, show that the consortium will obtain Celsius Network’s institutional loan portfolio, staked cryptocurrencies, mining unit, and other alternative investments. The group must make a $10 million deposit within three days to finalize the agreement.

Successful Bidder and Backup Positions

After a lengthy auction process, Fahrenheit — a consortium of buyers comprising venture capital firm Arrington Capital and miner US Bitcoin Corp — was chosen as the successful bidder. The Blockchain Recovery Investment Consortium (BRIC), including Van Eck Absolute Return Advisers Corp and GXD Labs, secured the backup position. Rival bidder NovaWulf, which was initially favored, ultimately lost out.

Assets and Cryptocurrency Holdings

As per the agreement, the new company will receive a substantial amount of liquid cryptocurrency, estimated to be between $450 million and $500 million. US Bitcoin Corp will also construct crypto mining facilities, including a state-of-the-art 100-megawatt plant.

Regulatory Approval Still Required

While Celsius and its creditors have accepted the bid, regulatory approval is still required to complete the acquisition. Bankruptcy court judge Martin Glenn had previously cautioned about potential “regulatory roadblocks” that could impede Celsius’s sale. Similarly, crypto exchange Binance.US terminated its purchase of Voyager’s $1 billion in assets due to federal officials appealing the sale, citing the uncertain regulatory environment in the United States.

Next Steps and Bankruptcy Court Approval

In the coming weeks, Celsius intends to negotiate and publicly file a plan sponsor agreement with Fahrenheit, a backup plan sponsor agreement with BRIC, a revised Chapter 11 plan, and a disclosure statement, all of which remain subject to bankruptcy court approval.

Celsius’s Bankruptcy and the Crypto Industry

Following a significant decline in crypto prices, Celsius filed for bankruptcy in July 2022 due to a surge in withdrawals resembling a bank run, revealing underlying liquidity problems. Its collapse foreshadowed a tumultuous period for the crypto industry, marked by the subsequent downfall of various prominent exchanges, lenders, and venture capital firms, leading to a prolonged “crypto winter” in the industry.