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, the Blockchain Recovery Investment Committee, is backed by Gemini, fund manager VanEck, Bitcoin mining firm Global X Digital, and Plutus Lending.
Chapter 11 bankruptcy
Celsius Network filed for Chapter 11 bankruptcy in July 2022, citing “extreme market conditions” after halting withdrawals amid rumors of insolvency. 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.”
Gemini and Coinbase Join the Bidding War
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.
The Bidding War for Celsius Assets
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.
The Fahrenheit consortium, on the other hand, proposes the creation of a new company focused on growing Celsius assets to make stakeholders whole. Arrington has stated that the new company will hold “substantial bitcoin mining assets, retail and institutional loans, a variety of crypto core assets, and a venture capital portfolio.” The consortium’s proposal could potentially offer Celsius customers a higher recovery rate than NovaWulf’s plan.
Conclusion
The involvement of Gemini and Coinbase in the bidding war for Celsius assets highlights the increasing interest in crypto lending and DeFi businesses. The two consortiums competing with NovaWulf Digital Management indicate the long-term potential of crypto lending. The auction of Celsius Network’s assets is highly anticipated by its customers who have been waiting for months to recover their funds. With two major consortiums vying for the assets, including established names like Gemini and Coinbase, it remains to be seen who will come out on top and what the future holds for the company and its stakeholders.
