Two of the largest cryptocurrency exchanges, Coinbase and Gemini, are reportedly part of two consortiums bidding for the assets of bankrupt crypto lender Celsius Network. The auction is scheduled for Tuesday, the 25th of April, 2023, at the New York offices of Kirkland and Ellis, the law firm handling Celsius’ bankruptcy. The two consortiums will participate in the auction alongside asset manager NovaWulf, the stalking horse bidder.
One consortium seeking to take over Celsius is Fahrenheit, a group backed by blockchain-based venture capital firm Arrington Capital and its founder Michael Arrington, alongside US Data Mining Group. Other backers include Proof Group Capital Management, former Algorand CEO Steven Kokinos, and investment banker Ravi Kaza. On the other hand, the second consortium is called Blockchain Recovery Investment Committee. It is backed by Gemini Trust, a company co-owned by the Winklevoss twins, fund manager Van Eck, Bitcoin mining firm Global X Digital, and Plutus Lending.
Assets and Proposed Plan
The assets of Celsius Network include holdings in several venture capital-backed startups, a loan book, and many crypto mining machines that could generate immediate returns for their new owner. NovaWulf’s proposed plan will see Celsius general Earn creditors, who deposited less than $5,000 on the platform, receive about 70% of their funds in liquid crypto assets. Users with Earn claims of more than $5,000 will receive liquid crypto assets and tokenized equity on the new Celsius platform wholly owned by the creditors.
Possible Winners
People familiar with the matter told Fortune that one of the two consortiums is most likely to win the auction because they are backed by well-known crypto entities that could extract more value by operating instead of liquidating the bulk of Celsius’ assets, unlike NovaWulf. NovaWulf, being the stalking horse bidder, has set the bar for other bidders ahead of the auction.
The participation of Coinbase and Gemini in the bidding process for Celsius Network’s assets showcases the interest of established crypto companies in acquiring new assets and expanding their market share. While the outcome of the auction remains uncertain, the involvement of well-known companies in the bidding process suggests that the acquisition of Celsius’ assets could result in the growth of the crypto industry.