GK8, the self-custody platform, which Celsius paid $115 million in 2021, is about to change hands, subject to regulatory permission.
GK8, an institutional digital asset self-custody platform owned by Celsius Network, has been awarded to Mike Novogratz-led investment firm Galaxy Digital Holdings, subject to court clearances and other closing requirements.
The platform’s almost 40-person team, including cryptographers and blockchain engineers, as well as the GK8 team office in Tel Aviv, will be acquired by Galaxy as part of the deal, according to a blog post from GK8 on December 2 and a press statement from Galaxy, assuming the acquisition goes through.
Self-custody platform GK8 provides custody, staking, DeFi, NFT support, tokenization, and trading for managing blockchain-based assets.
The platform’s developers assert that it can execute safe blockchain transactions without a network connection, significantly lowering the danger of hacking.
GK8 was purchased by Celsius in 2021 for $115 million, despite Galaxy not publicly disclosing the price it proposed for the company.
Galaxy’s founder and CEO, Mike Novogratz, described the purchase as a “crucial cornerstone in our effort to create a truly full-service financial platform for digital assets.”
“Adding GK8 to our prime offering at this pivotal moment for our industry also highlights our continued willingness to take advantage of strategic opportunities to grow Galaxy in a sustainable manner,” he added.
It was stated that Galaxy plans to support GK8’s ongoing activities while employing its technology to expand GalaxyOne, its trading platform.
Galaxy’s new custodial business will be run by GK8 founders, including CEO Lior Lamesh and CTO Shahar Shamai, who are anticipated to remain with the organization.
“With the backing of Galaxy, we aim to introduce new and exciting offerings to the industry that showcase a combination of Galaxy’s best-in-class services and GK8’s cryptography, security, and unparalleled R&D skills,” Lamesh said.
Celsius bankruptcy process
Since seeking Chapter 11 bankruptcy protection on July 13, Celsius has been in the bankruptcy process, outlining plans to sell some of its assets.
According to the court document, Celsius CEO Alex Mashinsky said the business would sell Bitcoin (BTC) generated by its mining operation in order to assist pay back at least one of its debts and generate future revenue.
In a document submitted on September 15 to the Southern District of New York’s US Bankruptcy Court, Celsius requested authorization to sell its stablecoin assets.
For abandoning its acquisition intentions, institutional cryptocurrency custodial service and wallet operator BitGo recently named Galaxy Digital in a $100 million lawsuit.
On August 15, 2022, Galaxy terminated the May 2021 agreement to buy the company, alleging BitGo’s purported failure to submit audited financial accounts by July 31, 2022, was a breach of the contract.
Then, on September 13, BitGo announced that it was suing Galaxy for more than $100 million in damages, claiming that Galaxy had “improperly repudiated” and “intentionally breached” the terms of their acquisition agreement with BitGo.
