{"id":139858,"date":"2023-05-25T10:03:27","date_gmt":"2023-05-25T10:03:27","guid":{"rendered":"https:\/\/crypto-economy.com\/?p=139858"},"modified":"2023-05-25T12:23:15","modified_gmt":"2023-05-25T12:23:15","slug":"celsius-chooses-fahrenheits-bid-for-bankruptcy-exit","status":"publish","type":"post","link":"https:\/\/crypto-economy.com\/celsius-chooses-fahrenheits-bid-for-bankruptcy-exit\/","title":{"rendered":"Celsius Chooses Fahrenheit’s Bid for Bankruptcy Exit"},"content":{"rendered":"

In a recent report<\/a> from Reuters, crypto lender Celsius Network LLC announced its decision to accept Fahrenheit’s proposal as the winning bid for its bankruptcy exit strategy<\/strong>. This development marks a significant step towards Celsius’s recovery and the management of a new entity to be owned by its creditors.<\/p>\n

Fahrenheit wins the Celsius bid<\/h2>\n

According to court filings<\/a>, the cryptocurrency<\/a> consortium Fahrenheit emerged victorious in acquiring the insolvent crypto lender, securing Celsius’s assets valued at around $2 billion<\/strong>. As part of the acquisition, Fahrenheit, backed by blockchain-based venture capital firm Arrington Capital, will provide the necessary capital, management expertise, and technology to establish and operate the newly formed company, NewCo.<\/p>\n

Celsius stated that the agreement with Fahrenheit entails substantial cryptocurrency holdings worth an estimated $450 million to $500 million, which will be transferred to NewCo. Furthermore, US Bitcoin Corp. plans to construct state-of-the-art crypto mining facilities, including a 100-megawatt plant, to bolster the new company’s operations.<\/p>\n

Under the proposed plan, Celsius account holders will become the sole owners of the new equity in NewCo.<\/strong> The company also disclosed that NewCo will be overseen by a new board of directors, a majority of whom will be appointed by the creditors.<\/p>\n

\"Celsius<\/p>\n

In the coming weeks, Celsius intends to negotiate and file a plan sponsor agreement with Fahrenheit,<\/strong> as well as a backup plan sponsor agreement with the Blockchain Recovery Investment Consortium (BRIC), affiliated with Gemini Trust, owned by the Winklevoss twins.<\/p>\n

A Path to bankruptcy exit<\/h2>\n

The bankruptcy filing by Celsius in July of the previous year sent shockwaves through the crypto industry. Meanwhile, several factors contributed to its fall, including the sharp decline<\/a> in cryptocurrency prices<\/strong>. The substantial drop, with Bitcoin falling by over 70% in the months preceding the bankruptcy, made it challenging for Celsius to meet its repayment obligations to investors.<\/p>\n

Transparency issues also played a role in Celsius’s downfall<\/b>, as the company failed to disclose the utilization of investors’ funds. The lack of transparency made it difficult for investors to assess the risks associated with Celsius.<\/p>\n

The bankruptcy of Celsius represents a significant event in the history of cryptocurrencies, shedding light on the need for responsible risk management and increased transparency within the industry. It further underscores that even well-established and reputable crypto companies must be more sensitive to issues that might ultimately lead to financial troubles.<\/p>\n","protected":false},"excerpt":{"rendered":"

In a recent report from Reuters, crypto lender Celsius Network LLC announced its decision to accept Fahrenheit’s proposal as the winning bid for its bankruptcy exit strategy. This development marks a significant step towards Celsius’s recovery and the management of a new entity to be owned by its creditors.<\/p>\n","protected":false},"author":26,"featured_media":139862,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[102,84,74],"tags":[5559,5275],"_links":{"self":[{"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/posts\/139858"}],"collection":[{"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/users\/26"}],"replies":[{"embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/comments?post=139858"}],"version-history":[{"count":0,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/posts\/139858\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/media\/139862"}],"wp:attachment":[{"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/media?parent=139858"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/categories?post=139858"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/tags?post=139858"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}