Celsius turns to Fahrenheit to oversee bankruptcy exit
Celsius named Fahrenheit, an association of various crypto companies and investors, the successful bidder in the auction for the bankrupt crypto lender’s assets on Wednesday, according to a court filing.
Fahrenheit is composed of venture capital firms Arrington Capital and Proof Group, mining group U.S. Bitcoin, as well as investors Steven Kokinos and Ravi Kaza. Kokinos was the CEO of Algorand, and Kaza is a longtime venture capitalist and digital assets investor.
As part of the bid, the consortium plans to create a new publicly traded company with assets from Celsius, which include the lender’s mining and decentralized finance crypto holdings, institutional loan portfolio, private equity and venture capital investments, and $500 million in liquid cryptocurrency.
The new company will then distribute the $500 million in crypto to Celsius account holders, according to a statement. “We appreciate the robust interest that the Celsius platform has received from competing bidders and look forward to working with Fahrenheit to expedite the restructuring and distribute recoveries to creditors,” said Celsius board members David Barse and Alan Carr.
In April, VC firm NovaWulf successfully bid for Celsius’s assets, but shortly thereafter Fahrenheit and the Blockchain Recovery Investment Consortium, or BRIC, submitted competing offers, and Fahrenheit subsequently won. Celsius named BRIC, which is composed of Van Eck Absolute Return Advisers and GXD Labs, as the backup bidder in case the deal with Fahrenheit falls through.
Earlier today, the Celsius auction concluded and Fahrenheit was selected as the winning bid. The BRIC bid was selected as the backup bid. The Committee appreciates the efforts of Celsius and all bidders for their efforts, which generated significant value for Celsius users.
— Celsius Official Committee of Unsecured Creditors (@CelsiusUcc) May 25, 2023
The conclusion of the auction for Celisus’s holdings marks the crypto lender’s potential exit from bankruptcy after going under in July 2022.
Celsius, founded by Alex Mashinsky, once advertised itself as a safe alternative to traditional banks. At conferences, Mashinsky often wore a T-shirt emblazoned with the slogan “Banks are not your friends.”
However, after the collapse of the so-called stablecoin Terra and cryptocurrency Luna in May 2022, the ensuing fallout claimed crypto hedge fund Three Arrows Capital, Voyager Digital, and then Celsius. In June, Celsius froze customer withdrawals, and a month later, it declared bankruptcy.
Mashinsky stepped down as CEO in September 2022. In January, the New York Attorney General sued him, alleging that he misled investors and committed crypto fraud. Mashinksy denied the allegations.
