Celsius Network Asset Auction: Pros, Cons, and the $2 Billion Bet on Crypto’s Future

Crypto consortium Fahrenheit acquires struggling Celsius Network, intricate auction scene, warm sunset glow, blurred background of competing bidders, Chapter 11 plan formation, hopeful mood, liquid assets distribution among account holders, hint of uncertainty in financial landscape, subdued yet optimistic ambiance.

The beleaguered crypto lender, Celsius Network, announced on May 25 that the auction process for transferring its assets has been completed, with the crypto consortium Fahrenheit LLC emerging as the winner. The consortium, comprised of US Bitcoin Corp, Arrington Capital, Proof Group, Steven Kokinos, and Ravi Kaza, was chosen in consultation with the official committee of unsecured creditors via a court-approved auction process.

Upon acquiring the assets of Celsius Network, Fahrenheit LLC will provide the necessary capital, management expertise, and technology to establish and operate a new company under a Chapter 11 plan. Notably, Simon Dixon, one of the largest creditors, unveiled on Twitter that Fahrenheit secured the bid for Celsius’ assets, valued at $2 billion. Furthermore, the consortium will spearhead the management of the new entity, owned by Celsius creditors.

As part of the plan, the liquid crypto from Celsius’ accounts will be distributed among its account holders. Additionally, settlements with the Custody and Withhold groups will ensue, alongside the management of Celsius’ illiquid assets by NewCo. The group will also acquire Celsius’ institutional loan portfolio, mining subsidiaries, and other alternative investments.

Members of the Special Committee of the Board, David Barse and Alan Carr, expressed their appreciation for the interest shown in the Celsius platform by the competing bidders and anticipated a smooth collaboration with Fahrenheit. This collaboration aims to expedite the restructuring process and distribute recoveries to the affected creditors.

Fahrenheit is expected to receive $500 million in liquid cryptocurrency, a sum that could potentially be reduced to $450 million in case of secondary market acquisitions. However, the company must first fulfill pending requisites within a few weeks to proceed with their ambitious plans for building and energizing 100 MW bitcoin mining facilities.

In a noteworthy development, the company has also secured a backup bid with the Blockchain Recovery Investment Consortium (BRIC). This cooperative endeavor will establish a mining enterprise in which Celsius creditors will receive 100% of equity interests.

Despite this seemingly positive turn of events, Fitch’s recent placement of US rating watches on a negative outlook, due to the debt ceiling standoff, has the cryptocurrency market experiencing a fresh slide, including Bitcoin. Consequently, investors are urged to perform thorough market research before venturing into cryptocurrencies, as the responsibility for personal financial losses does not rest with the author or the publication.

Source: Coingape

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