Celsius Auction Begins on April 25; Gemini and Coinbase Among Bidders
- Two new consortiums have joined the auction of the assets belonging to Celsius Network, which is scheduled for April 25 in New York.
- One of the consortiums includes Fahrenheit, backed by venture capital firm Arrington Capital, and crypto exchange Coinbase.
- The second consortium is the Blockchain Recovery Investment Committee, backed by Gemini, VanEck, Global X Digital, and Plutus Lending.
- The two consortiums are disputing assets with NovaWulf Digital Management, who is the “stalking horse bidder” in Celsius’s bankruptcy case.
The bankruptcy of Celsius Network, a crypto lending platform, put the entire crypto industry under the scrutiny of regulators around the globe and started a string of bankruptcies in the crypto community. The creditors of the platform have decided to auction off the assets belonging to the firm to get reimbursed for some of the money they invested. Interestingly, leading crypto exchanges in the United States, Gemini and Coinbase, will be throwing their names in the auction as well.
It is important to note that, as per the court documents, two new consortiums will be joining the auction of the assets of the crypto lending platform.
One of these groups of companies includes Fahrenheit, backed by venture capital firm Arrington Capital, owned by blockchain investor Michael Arrington. Other companies involved in the consortium include Proof Group Capital Management, former Algorand CEO Steven Kokinos, and investment banker Ravi Kaza.
More importantly, as per a Forbes report, Arrington mentioned that crypto exchange Coinbase was one of the companies that backed the bid that the consortium will put in the auction. In a Twitter post on April 22 that has now been deleted, Arrington confirmed that Coinbase was backing the Fahrenheit consortium. However, the exchange has yet to comment on the same.
The Twitter thread added that Arrington will work with creditors and investors to “make things right” for them and “grow the asset and drive a full recovery” for Celsius Network, whose popularity knew no bounds in the 2021 crypto market bull run.
On the other hand, the second consortium that will be involved in the bidding of assets belonging to Celsius Network is the Blockchain Recovery Investment Committee, backed by crypto exchange Gemini, fund manager VanEck, Bitcoin mining firm Global X Digital, and Plutus Lending.
It is also important to mention here that these two consortiums are disputing assets with NovaWulf Digital Management, who is the “stalking horse bidder” in the case of Celsius’s bankruptcy. This term is used to describe the first bidder in the auction of the assets belonging to a bankrupt firm, which sets the benchmark for other bidders, in this case the two consortiums backed by crypto exchanges Gemini and Coinbase.
The auction will be held on April 25 in New York and includes a direct cash contribution in the range of $45 million to $55 million from NovaWulf, according to the company’s proposal. The proposal also suggests the creation of a new platform that will be wholly owned by the creditors of Celsius Network. Under this proposal, customers can withdraw almost 70% of the funds that belong to them.
On the other hand, the Farenheit consortium also suggests a similar approach of creating a new platform “with the sole goal of growing those assets to make stakeholders whole.” This novel creation 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,” according to the details provided by Arrington.
Celsius was Operating like a Ponzi scheme
As reported earlier by Bitnation, the independent examiner for the Celsius bankruptcy case, Shoba Pillay, stated in his report that Celsius Network was operating like a Ponzi scheme while adding that the company “conducted its business in a starkly different manner than how it marketed itself to its customers.”
Pillay noted that “behind the scenes, Celsius conducted its business in a starkly different manner than how it marketed itself to its customers in every key respect,” while adding:
“Instead of buying CEL when it needed to pay rewards, Celsius began timing its purchases so that they would prop up CEL’s price by creating activity in the market. Celsius also began placing “resting” orders to buy CEL, which were triggered if the price of CEL dipped below a set amount,” confirmed the examiner.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
