The assets of the insolvent crypto lender Celsius Network will be the subject of a bidding war between two new consortiums on April 25 in New York.
The cryptocurrency exchanges Gemini and Coinbase are among the businesses taking part in the bids, according to reports and court documents. According to court records, one of the consortiums is Fahrenheit, which has the financial support of Michael Arrington’s blockchain investor company Arrington Capital.
Steven Kokinos, the former CEO of Algorand, Proof Group Capital Management, and investment banker Ravi Kaza are additional consortium members.
In a since-deleted tweet on April 22, according to a story from Fortune, Arrington indicated that Coinbase was one of the businesses supporting the Fahrenheit alliance. To the magazine, Coinbase declined to respond with a statement.
The Blockchain Recovery Investment Committee, sponsored by cryptocurrency exchange Gemini, fund manager VanEck, Bitcoin (BTC $27,384) mining company Global X Digital, and Plutus Lending, is the second bidder for Celsius assets.
Both consortiums are disputing the assets with NovaWulf Digital Management, the “stalking horse bidder” — a term used to describe the first bidder of a bankrupt company that sets the bar for the other bidders.
In addition to a direct cash commitment in the amount of $45 million to $55 million, NovaWulf’s proposal calls for the development of a new public platform that will be entirely owned by Celsius creditors. Under NovaWulf’s proposal, customers could receive up to 70% of their money back.
The Fahrenheit alliance also suggests founding a new business “with the sole goal of growing those assets to make stakeholders whole” in light of Arrington’s comments.” The company would be run by “a group of proven crypto operators” and hold “substantial bitcoin mining assets, retail and institutional loans, a variety of crypto core assets, and a venture capital portfolio,” said Arrington.
The auction is a crucial step for Celsius’ clients to get their money back. After stopping withdrawals, the company announced in July 2022 that it had filed for Chapter 11 bankruptcy, claiming “extreme market conditions” and debunking claims that it was bankrupt.
