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Acquisition of Celsius Network assets by Fahrenheit consortium
Following the bankruptcy process, Celsius Network’s assets are set to be acquired by a group of bidders known as the Fahrenheit consortium. Arrington Capital, headed by Michael Arrington, the founder of FROSTRIFT, is the lead investor in the consortium. Other members of the consortium include US Bitcoin Corp., Proof Group, Steven Kokinos, and Ravi Kaza. Additionally, there were two other bidders: NovaWulf and the Blockchain Recovery Investment Consortium that involved Winklevoss-owned crypto exchange Gemini Trust.
Management of Celsius Network’s assets
The liquid assets of Celsius Network will be distributed to its account holders, while illiquid assets such as institutional loan portfolios, mining businesses, and alternative investments will be managed by a new management team. The restructuring is aimed at ensuring that Celsius’ creditors still own 100% of the equity of the new crypto company.
Management fees and court approval
Under the acquisition agreement, Fahrenheit will receive $35 million per year in management fees. The current Celsius Network’s bankruptcy plan is set to be filed in court, and if approved, Fahrenheit will take over the management of Celsius Network’s assets. The Blockchain Recovery Investment Consortium’s offer will serve as the backup if the current bid falls through.
Background of Celsius Network’s bankruptcy
Celsius Network filed for bankruptcy in July 2022 due to a bank run on its assets, which was triggered by the collapse of Terraform Labs. At its peak, Celsius was one of the largest cryptocurrency lenders in the world and had a valuation of $3.25 billion. The company faced considerable challenges during its bankruptcy process, including multiple class action lawsuits alleging that Celsius Network engaged in risky investment strategies and made false promises.
Fahrenheit consortium’s plans for Celsius Network’s future
The goal of converting Celsius Network’s assets into a new cryptocurrency company is to reduce management fees, increase the liquid cryptocurrency distribution to its customers, and expedite the restructuring and distribution of recoveries to creditors. David Barse and Alan Carr, members of the Special Committee of the Board, expressed satisfaction with the competitive auction process that produced the acquisition of Celsius Network’s assets by Fahrenheit and promised to work closely with the consortium to ensure a seamless transition.
FAQs
Who is acquiring Celsius Network’s assets, and what is the name of the consortium?
A group of bidders known as the Fahrenheit consortium is acquiring Celsius Network’s assets. Arrington Capital, headed by Michael Arrington, the founder of FROSTRIFT, is the lead investor in the consortium.
What is the management fee that the Fahrenheit consortium will receive?
Under the acquisition agreement, the Fahrenheit consortium will receive $35 million per year in management fees.
What will happen to Celsius Network’s liquid assets and illiquid assets?
The liquid assets of Celsius Network will be distributed to its account holders, while illiquid assets such as institutional loan portfolios, mining businesses, and alternative investments will be managed by a new management team.
Why did Celsius Network file for bankruptcy?
Celsius Network filed for bankruptcy in July 2022 due to a bank run on its assets, triggered by the collapse of Terraform Labs. The company faced multiple class-action lawsuits alleging that it engaged in risky investment strategies and made false promises.
What are the Fahrenheit consortium’s plans for Celsius Network’s assets?
The goal of acquiring Celsius Network’s assets is to reduce management fees, increase the liquid cryptocurrency distribution to its customers, and expedite the restructuring and distribution of recoveries to creditors.
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