Fahrenheit Outbids Rivals to Acquire Insolvent Celsius Network: Implications and Concerns

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The crypto world has recently witnessed an intriguing turn of events, as a consortium called Fahrenheit has successfully outbid others in acquiring the insolvent lender, Celsius Network. Backed by notable entities such as US Bitcoin Corp and Arrington Capital, the consortium is set to inherit Celsius’s institutional loan portfolio, staked crypto assets, Bitcoin mining unit, and other cryptocurrency-related investments.

As part of the acquisition, the newly-formed company will receive an estimated $450 to $500 million in liquid cryptocurrency. US Bitcoin Corp will also oversee the construction of Bitcoin mining facilities, including a 100-megawatt plant.

The move, praised by the Special Committee of the Board members, David Barse and Alan Carr, is expected to result in hundreds of millions of dollars in lower management fee savings and increased liquid cryptocurrency distributions for Celsius’s customers. Moreover, it is believed to open up excellent options for transitioning out of chapter 11 bankruptcy.

However, it should be noted that Celsius had previously declared bankruptcy in July last year, with a $1.2 billion hole in its balance sheet. The process of finding a successful restructuring plan has been a long and winding one, with digital asset investment firm Novawulf initially announced as the winning bidder in February. Nevertheless, despite their early lead, Novawulf ultimately succumbed to Fahrenheit.

For the deal to be finalized, Fahrenheit must submit a $10 million deposit within three days, according to court documents. Additionally, the company revealed that they have obtained a backup bid from the Blockchain Recovery Investment Consortium (BRIC), which could be activated if needed.

Should BRIC step in, they would establish a publicly traded mining business where Celsius creditors would receive full ownership of equity interests, along with a potential management contract with GlobalXDigital.

In the upcoming weeks, Celsius is set to engage in negotiations and publicly file crucial documents, subject to the bankruptcy court’s approval. This thrilling turn of events has undoubtedly caught the attention of the crypto community, revealing both the high stakes involved in such acquisitions and the level of resilience shown by the industry’s major players.

While the acquisition of Celsius Network by the Fahrenheit consortium holds promise for the future of the insolvent lender, it also raises questions about the stability of similar companies operating in the ever-volatile world of cryptocurrencies. As the story unfolds, enthusiasts and skeptics alike will be keen to observe how this deal may impact the broader market and whether it will serve as a lesson for other struggling cryptocurrency lenders.

Source: Decrypt

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