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Celsius bankruptcy auction draws two new bidders

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Apr 24, 2023
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Illustration: Gabriella Turrisi/Axios

New bidders have emerged for crypto lender Celsius, which will hold an auction Tuesday to determine who will take over the bankrupt firm’s assets.

Why it matters: The crypto-native coalitions joining the auction contrast with stalking-horse bidder NovaWulf, which is relatively new to digital assets.

Driving the news: According to a bankruptcy filing from over the weekend, two new groups will compete with NovaWulf Digital Management’s initial bid.

  • The first, Fahrenheit, is backed by venture capitalist Michael Arrington, former Algorand CEO Steven Kokinos, investment banker Ravi Kaza, with U.S. Data Mining Group and Proof Group joining in.
  • The other new bidder is Blockchain Recovery Investment Committee, backed by the Winklevoss twins’ Gemini Trust, fund manager VanEck, Abra and Global X Digital.

Flashback: In February, NovaWulf submitted a proposal where it would make a direct cash contribution of $45 million to $55 million to a new company that it would manage.

  • The firm estimated that under its plan, about 85% of Celsius’ customers — those with less than $5,000 on the platform — would recover about 70% of their claims in liquid crypto.
  • Larger creditors would instead receive tokenized shares in the new firm, which will trade on Figure Technology's Provenance blockchain.

The other side: In a series of tweets, Arrington laid out Fahrenheit’s vision for a revamped Celsius, which would include “substantial bitcoin mining assets, retail and institutional loans, a variety of crypto core assets, and a venture capital portfolio.”

  • Both Fahrenheit’s coalition and the Gemini/VanEck group center around familiar investors in crypto.
  • NovaWulf, by contrast, is still relatively new to digital assets and founded by Blackstone and King Street vets that specialized in investing in distressed assets.

The intrigue: In his thread, Arrington initially mentioned publicly traded crypto exchange Coinbase as part of the Fahrenheit coalition but has since deleted the tweet.

What’s next: The auction is scheduled to take place Tuesday at 2p.m. in the office of debtors’ counsel Kirkland & Ellis.

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