On the 25th of April, 2023, leading cryptocurrency exchanges Coinbase and Gemini are part of two separate consortiums gearing up to bid for the assets of bankrupt crypto lender Celsius Network. The auction, set to take place at the New York offices of Kirkland and Ellis, has attracted significant attention from key industry players, as revealed in a recent court filing and Fortune report.
Celsius Network auction details and participating consortiums
The court document specifies that the auction will be held at the law firm handling Celsius’ bankruptcy, Kirkland and Ellis, from 2 pm EPT. Among the consortiums seeking to take control of Celsius’ assets are Fahrenheit and Blockchain Recovery Investment Committee.
Fahrenheit, backed by blockchain-based venture capital firm Arrington Capital and its founder Michael Arrington, is also supported by US Data Mining Group, Proof Group Capital Management, former Algorand CEO Steven Kokinos, and investment banker Ravi Kaza. Coinbase’s participation in the Fahrenheit consortium was mentioned in a since-deleted tweet by Arrington, though Coinbase itself has not commented on the matter.
The second consortium, Blockchain Recovery Investment Committee, is backed by Gemini Trust, a company co-owned by the Winklevoss twins, fund manager Van Eck, Bitcoin mining firm Global X Digital, and Plutus Lending.
NovaWulf as the stalking horse bidder
Asset manager NovaWulf has been designated the stalking horse bidder for the auction, setting the bar for other bidders in advance. NovaWulf’s proposed plan reimburses Celsius general Earn creditors who deposited less than $5,000 on the platform with approximately 70% of their funds in liquid crypto assets.
Users with Earn claims exceeding $5,000 will receive liquid crypto assets and tokenized equity on a new Celsius platform, which the creditors will wholly own.
Expected outcomes and the value of Celsius Network’s assets
Sources familiar with the situation told Fortune that one of the two consortiums, Fahrenheit or Blockchain Recovery Investment Committee, will most likely win the auction.
These consortiums are backed by well-established crypto entities that can potentially extract more value by operating Celsius Network’s assets rather than liquidating them, unlike NovaWulf.
Celsius Network’s assets include holdings in venture capital-backed startups, a loan book, and numerous crypto mining machines that could generate immediate returns for the new owner.
As the auction approaches, the cryptocurrency industry eagerly awaits the outcome. It could have significant implications for the future of crypto lending and the players involved.