Do we remember Celsius? That one crypto exchange that began the first of many crypto bear markets back in July of 2022?
Guess what? Their assets are all for sale, and just as you might expect, the crypto carrions are all circling around the once-great crypto exchange.
Who is Going After the Remains of Celsius?
Crypto exchanges Gemini and Coinbase are reportedly among the bidders for the assets of bankrupt crypto lender Celsius Network, as per court filings and reports.
The auction, scheduled for April 25 in New York, will see two consortiums competing with NovaWulf Digital Management, the “stalking horse bidder.”
The first consortium, Fahrenheit, is backed by blockchain investor Michael Arrington’s venture capital firm Arrington Capital, Proof Group Capital Management, former Algorand CEO Steven Kokinos, and investment banker Ravi Kaza.
The second group is the Blockchain Recovery Investment Committee.
Let’s back up a bit and jump into a time ship, sailing towards an overly warm summer at the beginning of July last year. That’s when as many would say, “things hit the fan.”
That is when Celsius Network filed for Chapter 11 bankruptcy, citing “extreme market conditions” after halting withdrawals amid rumors of insolvency.
Coming back to the present: NovaWulf Digital Management’s proposal includes a direct cash contribution of $45 million to $55 million and the creation of a new public platform wholly owned by Celsius creditors, enabling customers to recover up to 70% of their funds.
Both consortiums are disputing the assets with NovaWulf, and Arrington’s Fahrenheit consortium also proposes the creation of a new company “with the sole goal of growing those assets to make stakeholders whole.”
What are the Crypto Conglomerates Fighting Over?
According to court filings, the Celsius Network assets up for auction include intellectual property, customer data, cryptocurrencies, and loans made by Celsius to its customers. Gemini and Coinbase’s participation in the bidding war indicates their continued interest in acquiring promising crypto businesses, particularly those in the lending space.
Gemini, founded by the Winklevoss twins, has been actively expanding its business in the crypto space, particularly in the DeFi and lending sectors. The exchange launched its own credit card, Gemini Credit Card, in January 2022, allowing users to earn rewards in cryptocurrencies.
It has also invested in DeFi projects such as Uniswap, Compound, and Aave.
Coinbase, on the other hand, has been focused on expanding its institutional services, including its Prime brokerage service and custody offering.
The exchange has also made acquisitions in the DeFi space, including Paradex and Dharma. It has also been looking to expand its lending services, with reports indicating that it is working on a crypto-based margin lending platform.
What Is This Bidding War Really About?
The bidding war for Celsius assets highlights the increasing interest in crypto lending and DeFi businesses. Celsius, a platform that allows users to borrow and lend cryptocurrencies, was once considered a rising star in the industry, attracting over 1.2 million users and managing over $20 billion in assets.
The participation of established players like Gemini and Coinbase in the auction indicates their belief in the long-term potential of crypto lending and DeFi.
The two consortiums are competing with NovaWulf Digital Management, which has already proposed a plan to help Celsius customers recover their funds. NovaWulf’s proposal includes a direct cash contribution of up to $55 million and the creation of a new public platform wholly owned by Celsius creditors.
So who will get to have the last slice of Celsius? Well, I guess we will have to find out and see.