![Celsius Bankruptcy Struggles Coming to an End as Fahrenheit Clinches Win in Auction Celsius Bankruptcy Struggles Coming to an End as Fahrenheit Clinches Win in Auction](https://i0.wp.com/cryptopotato.com/wp-content/uploads/2022/07/Vermont_Celsius.jpg?w=896&ssl=1)
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Fahrenheit LLC – a consortium of investors that includes the largest crypto exchange in the United States – has emerged as the winner in the court-approved auction process to acquire insolvent lender Celsius Network.
Fahrenheit will provide the capital, management team, and technology required to successfully set up and operate the new company. It is also required to pay a cash deposit of $10 million within three days to seal the deal.
Fahrenheit to Acquire Celsius Assets
Fahrenheit’s consortium consists of US Bitcoin Corp, Proof Group Capital Management LLC, Ravi Kaza, former Algorand CEO Steven Kokinos, and Coinbase.
According to the court filing, the group will acquire Celsius’ institutional loan portfolio, mining business, and alternative investments for the benefit of account holders. The new company will be spearheaded by a Board of Directors, a majority of which will be appointed by creditors.
The distribution of Celsius’s liquid crypto to account holders, settlements with the Custody and Withhold groups, as well as managing Celsius’ illiquid assets by the new company have been outlined as the crux of the agreement.
The deal also requires the new company to receive $500 million in liquid cryptocurrency, which may be reduced to $450 million in the event of secondary market purchases. Fahrenheit group’s US Bitcoin Corp will be in charge of building a range of crypto mining facilities, including a new 100-megawatt plant.
Speaking about the lengthy auction process, David Barse and Alan Carr, members of the Special Committee of the Board said:
“We are very pleased that our competitive auction process produced a positive result for customers, including, most prominently, hundreds of millions of dollars in lower management fee savings and increased liquid cryptocurrency distributions to Celsius’ customers. We appreciate the robust interest that the Celsius platform has received from competing bidders and look forward to working with Fahrenheit to expedite the restructuring and distribute recoveries to creditors.”
Meanwhile, Celsius has secured a backup bid with the Blockchain Recovery Investment Consortium which would provide for the “creation of a pure play, publicly traded mining business.” The creditors of the collapsed lender will receive 100% of the equity interests with a potential management contract with GlobalXDigital and an orderly winddown of its remaining assets.
Celsius Controversies
The latest development comes almost a year after Celsius filed for Chapter 11 protection. The New Jersey-based company reportedly had over 1.7 million registered users and nearly 300,000 active users with account balances greater than $100.
Since sliding into bankruptcy, Celsius had come under fire for record-keeping and glaring deficiencies in its internal systems. Its founder Alex Mashinsky was accused of defrauding investors out of billions of dollars in crypto by concealing the failing health of the platform.
In a response to allegations, Mashinsky argued that the complaint “parrots misinformation” about him and Celsius Network and “borrows others’ baseless conclusions.” He filed a defense motion seeking to dismiss the complaint against him.
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