An upcoming auction for the assets of bankrupt crypto lender Celsius is sparking interest, with two separate consortiums, which both have high-profile crypto-firm backing, entering the fray.

According to reports from Fortune and Bloomberg and others, along with fresh court documents, the auction for the company now looks set to be locked in a three-way battle.

Two newly emerged consortiums, one backed by the Coinbase crypto exchange giant, the other by rival US exchange Gemini, are set to challenge the initial interested party and former frontrunner NovaWulf for the Celsius assets.

This news ought to give at least some hope to the many Celsius creditors waiting in limbo with trapped funds they’d locked up in the Celsius lending-and-borrowing network – a popular, centralised yield-earning option before the company collapsed midway through last year amid a wider “crypto contagion” stemming from the Terra Luna implosion.

At the time of entering its Chapter 11 bankruptcy in July 2022, Celsius reportedly owed its 600,000 or so creditors as much as US$4.7 billion dollars.

 

Three-way battle for Celsius assets and hope for hapless creditors

Per the updated bankruptcy filing details, Fahrenheit is the name of the reportedly Coinbase-backed consortium, which also has strong backing from venture capitalist Michael Arrington among others.

As reported by Fortune, Arrington published a series of tweets that included a mention (since deleted) of Coinbase’s involvement, which the exchange has neither confirmed nor denied.

The other new entity is the Blockchain Investment Committee, backed by the Winklevoss-twins-owned Gemini Trust, as well as VanEck – a prominent fund manager that has, in the past, attempted to push a spot Bitcoin ETF in the US.

The auction will take place this week on April 25 in New York, and the two new consortiums will be disputing the assets with NovaWulf Digital Management, which had set the initial “stalking horse bidder” initiative with a proposal that would reportedly see small creditors (less than US$5k) receive about 70% of their funds back. Under that proposal, larger creditors would be compensated in the form of tokenised equity through a scheme powered by the Provenance Blockchain.

Per the Fortune article, “a person familiar” with the situation said the new bidders would be superior to NovaWulf because “they are backed by veteran crypto operators who could likely extract more value by operating rather than liquidating the bulk of Celsius’s assets”.

 

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