Banking giant Goldman Sachs is reportedly working with a group of investors who would purchase Celsius Network’s distressed assets at discounted valuations.
If there’s someone who can save crypto lending platform Celsius Network from being insolvent, it could be Wall Street banking giant Goldman Sachs Groups Inc (NYSE: GS). As per the CoinDesk report, Wall Street banking giant Goldman Sachs is looking to raise $2 billion from a group of investors to buy the distressed assets of Celsius.
People familiar with the matter said that the proposed deal will allow investors to get Celsius’ assets at a major discount. As of now, Goldman Sachs is reportedly gauging interest and seeking commitment from the Web3 crypto funds.
The sources said that it has also approached funds specializing in distressed assets as well as traditional financial institutions with cash on their hands. Celsius Networks might be selling its assets, most likely crypto, at cheap. Stakeholders participating in fundraising will likely be responsible for handling them later, reports CoinDesk.
Following the crypto market correction, the Celsius Network has been in deep waters facing huge liquidity issues. As of May 2022 end, Celsius had more than $12 billion in assets under management. Of them, the company lends out more than $8 billion to clients.
Citing “extreme market conditions” Celsius Network decided to halt withdrawals on its platform earlier this month. To come out of the mess, Celsius has hired restructuring attorneys from the law firm Akin Gump Strauss Hauer & Feld. Furthermore, it is also working with Citigroup to seek advice on possible solutions.
Take It With a Pinch of Salt
While the reports of Goldman Sachs coming into the picture might be a major relief for the crypto community, however, it would be too early to say anything. Arthur Hayes, CEO of crypto derivatives exchange BitMEX said:
Please don’t believe @GoldmanSachs is putting their own money at risk unless they explicitly say so. GS is doing what advisory banks do, assemble a bunch of investors, and help them structure the purchase of distressed assets for a phat fee.
Hayes added that the community can rejoice only once withdrawals are enabled and creditors got some of their money back. Only that would restore the confidence of investors. Hayes further went out calling “bailouts” as PR stunts.
The latest reports have been that Celsius Network CEO Alex Mashinsky is on the run. Popular crypto market evangelist Mike Alfred tweeted: “Alex Mashinsky attempted to leave the country this week via Morristown Airport but was stopped by authorities. Unclear at this moment whether he was arrested or simply barred from leaving. Please contact me if you have more information on this”.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
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