The defunct cryptocurrency lender Celsius Network is currently preparing to launch a new business. After Fahrenheit LLC, a group of bidders led by investment company Arrington Capital, won an auction to manage its assets, information about this situation leaked on the internet.
Furthermore, according to reports, Fahrenheit competed in an auction that was purportedly held as part of the lender’s bankruptcy proceedings for the right to run Celsius‘s remaining assets. Competitors like Novawulf Digital Management and a group supported by the cryptocurrency exchange Gemini Trust Co. were defeated by Fahrenheit.
More Details About Fahrenheit
Other participants in the Fahrenheit consortium include Steven Kokinos, Ravi Kaza, Proof Group, US Bitcoin Corp., and US Bitcoin, among others. According to reports, this new organization would offer funding, a fresh management group, and technology.
According to a statement on Thursday, both of these would purportedly be necessary to build and run a reorganized firm based on Celsius’s assets. Creditors of Celsius will now own the aforementioned new business.
In contrast, a court filing from last Thursday revealed that the Fahrenheit group will be paid $35 million a year to run the company. Additionally, some of the equity held by the creditors may be diluted to pay the managers of the firm stock-based compensation.
In July of last year, Celsius declared bankruptcy with a $1.19 billion loss. This bankruptcy came to light after TerraUSD’s demise and at a time when the price of cryptocurrencies was falling, which caused hazardous wagers on digital assets to lose money.
The former CEO of Celsius, Alex Mashinsky, is purportedly being sued by the attorney general of New York, according to reports from earlier this year. He was charged with misleading investors by regularly making false claims regarding the security of the lender.
This month, Mashinsky filed a motion to dismiss the case. In a recent court filing, the bankruptcy estate revealed the assets that the Fahrenheit group will be in charge of managing, including illiquid cryptocurrency holdings, a portfolio of institutional loans, private equity and venture capital investments, Celsius’s mining operation, and $500 million in “liquid cryptocurrency.”
A new Chapter 11 bankruptcy plan is also supposed to be written and released in the upcoming weeks. This information was provided by Celsius, who also stated that the revised proposal would then require court approval. Kokinos, a former CEO of Algorand, will lead the new business, and US Bitcoin Chief Financial Officer Joel Block will serve as its CFO, according to the application.
The competing bid from the Gemini-backed consortium group called for spinning off Celsius’s mining operation as a publicly traded company controlled entirely by creditors and winding down the company’s remaining assets.
In the event that the Fahrenheit purchase falls through, Celsius claims that bid is a fallback offer. Celsius Network LLC, 22-10964, US Bankruptcy Court for the Southern District of New York, is the company that filed for bankruptcy.