In the ongoing bankruptcy proceedings of lender Celsius, a consortium known as Fahrenheit has emerged as the frontrunner in the auction for the lender’s $2 billion worth of assets.
This consortium, comprising venture capital firm Arrington Capital and miner U.S. Bitcoin Corp, has gained traction as the leading bidder, as revealed during a Wednesday hearing.
Initially, the stalking horse bidder in the auction was NovaWulf, an investment firm founded by the duo behind bitcoin miner TeraWulf (WULF). NovaWulf set the baseline terms for the auction, acting as the initial bidder. The auction process is expected to conclude possibly as early as this week.
According to court filings, the assets in question include Celsius’s mining unit, loan portfolio, staked cryptocurrency, and other alternative investments. Fahrneheit, formalized as a limited liability company, boasts backing from notable entities such as Arrington Capital, U.S. Data Mining Group (known as U.S. Bitcoin Corp.), Proof Group Capital Management, former Algogrand CEO Steven Kokinos, and investment banker Ravi Kaza.
Furthermore, leading cryptocurrency exchange Coinbase (COIN) is reported to be involved in the bidding process, as stated by Michael Arrington, founder of the renowned venture capital firm, in a now-deleted tweet that was reported by Fortune. Michael Arrington, also known as the founder of popular tech media site TechCrunch and information platform Crunchbase, revealed Coinbase’s participation in the bid.
While both bids share similarities, Fahrenheit’s strategic plan involves issuing equity for the acquired assets, which will then be managed under the newly established company. In contrast, NovaWulf had initially intended to tokenize the shares on the Providence blockchain, distinguishing the two bids in their approach to asset management.
“Our bid not structured as a simple asset purchase. We are proposing that the assets be placed into a new company and is run with the sole goal of growing those assets to make stakeholders whole,” Arrington said in a tweetannouncing the Fahrenheit project.
During a recent hearing, Judge Martin Glenn expressed apprehension regarding potential regulatory obstacles that could impede the auction process. To illustrate his concern, he drew a parallel with Voyager, a crypto firm that faced bankruptcy last year. The sale of Voyager’s $1 billion worth of assets to Binance was abruptly terminated due to regulatory pushback. This comparison raised red flags about potential hurdles the current auction may encounter.
The legal team representing Celsius attempted to assuage the judge’s worries by highlighting ongoing discussions with regulatory authorities. They emphasized their commitment to addressing any regulatory concerns that may arise during the transaction.
It is worth noting that Proof Group’s Managing Director, Noah Jessop, has also invested in bankrupt bitcoin miner Core Scientific (CORZ), as indicated in his Twitter bio. Core Scientific is currently undergoing Chapter 11 bankruptcy proceedings and is embroiled in a dispute with Celsius, adding an additional layer of complexity to the situation.