Crypto consortium Fahrenheit has won a bid to acquire insolvent lender Celsius Network, whose assets were previously valued at around $2 billion, according to court filings made early in the morning of Thursday. The group will acquire Celsius’s institutional loan portfolio, staked cryptocurrencies, mining unit, and additional alternative investments, and must pay a deposit of $10 million within three days to cement the deal, court filings show. Fahrenheit, a consortium of buyers that includes venture capital firm Arrington Capital and miner US Bitcoin Corp., was selected as the successful bidder following a lengthy auction process.
The Blockchain Recovery Investment Consortium, which includes Van Eck Absolute Return Advisers Corporation and GXD Labs LLC, was selected as backup, with rival bidder NovaWulf—at one stage the firm favorite—losing out. Under the terms of the deal, the new company will get between $450 and $500 million in liquid cryptocurrency, and US Bitcoin Corp. will construct a range of crypto mining facilities, including a new 100 megawatt plant.
The bid, though accepted by Celsius and a committee of its creditors, must still be approved by regulators to finalize the acquisition. Months ago, Bankruptcy Court Judge Martin Glenn warned that “regulatory roadblocks” could plague the sale of Celsius, much like they thwarted a fellow lender’s acquisition. In April, crypto exchange Binance.US abruptly terminated its purchase of bankrupt crypto lender Voyager’s $1 billion in assets after federal officials appealed the sale, citing the “hostile and uncertain regulatory climate” in the U.S.
Celsius filed for bankruptcy last July after cratering crypto prices triggered a bank-run style rush of withdrawals that exposed the platform’s profound liquidity issues. The exchange’s implosion was a harbinger of things to come for the crypto industry, which later saw the collapse of several other high profile crypto exchanges, lenders, and venture capital firms that plunged the industry into a deep winter.