Celsius submits revised bankruptcy plan after Fahrenheit deal
- Celsius’ plan needs to be approved by the New York bankruptcy court.
- Fahrenheit won the bid to acquire Celsius’ assets after a lengthy auction process.
Defunct crypto lender Celsius has submitted an updated bankruptcy plan to reflect the Fahrenheit consortium’s successful bid for its assets.
Fahrenheit, a consortium of buyers led by venture capital firm Arrington Capital and crypto miner U.S. Bitcoin Corp, was declared the winning bidder last month. Fahrenheit was picked as the winning bidder after a lengthy auction process.
It defeated NovaWulf’s bid for the company’s assets which were previously valued at roughly $2 billion.
Celsius’ plan, filed on 15 June, must be approved by the New York bankruptcy court supervising the wind-up, and is facing opposition from the creditors.
This new venture will receive liquid crypto assets worth $450-$500 million as a part of the Fahrenheit deal. The U.S. Bitcoin Corp will build a variety of crypto mining facilities, including a new 100-megawatt facility.
Fahrenheit is set to acquire Celsius Network’s institutional loan portfolio, staked crypto assets, mining units and other alternative enterprises. Celsius’ assets were originally estimated at more than $2 billion.
Violation of consumer lending law, claims lawyer
“This proposed treatment violates every consumer lending law out there,” tweeted David Adler of law firm McCarter & English. He said that the group of borrowers he represents in the case will oppose the plan because Celsius won’t return their collateral.
Adler noted that the Celsius group must demonstrate that they are progressing the case and talking with stakeholders in order to retain the sole right to propose a bankruptcy plan. He added that his clients were ignored and “treat[ed] like mushrooms for the past seven weeks.”
Celsius filed for bankruptcy in July 2022 following a sharp decline in the value of crypto assets. This development took place as we witnessed a rush of withdrawals that seemed like a bank run, demonstrating underlying liquidity of the enterprise.