Fahrenheit outbids NovaWulf to acquire Celsius Network’s assets worth $2B

YEREVAN (CoinChapter.com) — Fahrenheit has emerged as the successful bidder to acquire Celsius Network’s assets once valued at $2 billion, according to court filings published on Thursday.

The company surpassed rival bidder NovaWulf to secure the deal. Meanwhile, the bankrupt crypto lender selected Blockchain Recovery Investment Consortium (BRIC) as a backup option.

The Fahrenheit group is backed by Arrington Capital, US Bitcoin Corp, Steven Kokinos, Ravi Kaza, and Proof Group. 

In addition to staked cryptocurrencies, Fahrenheit will acquire Celsius’s institutional loan portfolio, mining unit, and alternative investments. 

The group must submit a $10 million deposit within three days to finalize the agreement. After the acquisition, Fahrenheit will provide the management team, capital, and technology for a new company (NewCo). They will also need to ensure compliance with regulations.

The New Jersey-based bankrupt cryptocurrency lender announced the deal on its official Twitter handle. The firm also issued an official press release on the matter. 

“Earlier today, the Celsius auction concluded and Fahrenheit was selected as the winning bid. The BRIC bid was selected as the backup bid. The Committee appreciates the efforts of Celsius and all bidders for their efforts, which generated significant value for Celsius users,” 

the company wrote. 

As part of the deal, the newly formed company will receive a substantial amount of liquid cryptocurrency, estimated to be between $450 and $500 million. In addition, US Bitcoin Corp will spearhead the construction of multiple Bitcoin mining facilities, including a 100-megawatt plant. 

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Celsius Network is pleased, but regulatory approval still pending

Alan Carr and David Barse, members of the Special Committee of the Board, expressed their satisfaction with the auction process and highlighted the benefits for Celsius customers.

“The dynamic engagement in our auction provided us with excellent options for our exit from chapter 11. We are grateful for the collaboration of the Committee, and with our path now set, we are looking forward to enabling our customers to move forward from this process,”  

they announced, according to CryptoDaily. 

While Celsius and its creditors have accepted the bid, regulatory approval is still pending. 

Bankruptcy Court Judge Martin Glenn cautioned about potential regulatory hurdles that could impede the acquisition. The judge cited the Binance US and Voyager deal as an example to make his case. 

Binance US had to abandon its purchase of Voyager’s $1 billion in assets due to opposition from federal officials, attributing the decision to an uncertain and hostile regulatory environment.

The once-popular crypto lender filed for bankruptcy in July 2022. A month earlier, it had frozen all transactions. As a result, CEL, the network’s native token, totally crashed.

In late January, a court investigation revealed that Celsius didn’t follow its promoted business model. The company also hid from investors that its ICO for CEL tokens didn’t reach the $50 million target. 

Moreover, former CEO Alex Mashinsky failed to fulfill his promise of buying unsold tokens. To compensate, the company secretly bought its tokens without the customers’ knowledge.

Mashinksy resigned from the company in September 2022. Last December, a New York Attorney General sued him for defrauding investors. 

With Celsius Network looking to make a comeback, it remains to be seen if Fahrenheit will succeed in finalizing the acquisition.