On Thursday, it was announced by bankrupt crypto lender Celsius Network LLC that the proposal put forth by Fahrenheit has been chosen as the winning bid for the management of a new entity. This will be owned by its creditors, facilitating its path out of bankruptcy.
Celsius stated that Fahrenheit, a consortium including Arrington Capital, a venture capital firm based on blockchain technology, will provide the necessary capital, management team, and technology to establish and operate the new company, referred to as NewCo.
Ownership Transfer and Board Supervision: Account Holders’ Ownership of NewCo
The company further noted that the account holders of Celsius Network LLC will possess 100% ownership of the new equity in NewCo.
Additionally, a fresh board of directors will supervise NewCo. Moreover, Creditors will appoint majority of its members.
Celsius also confirmed securing a backup bid from the Blockchain Recovery Investment Consortium (BRIC). It is a holding company associated with Gemini Trust, owned by the Winklevoss brothers.
Chapter 11 Filing and Bankruptcy Amidst Crypto Industry Growth by Celsius Network LLC
Celsius had filed for Chapter 11 protection in July. It joined the ranks of several crypto lenders that faced bankruptcy amidst the rapid growth of the industry during the COVID-19 pandemic.
Furthermore, the company initiated an auction on April 22. It aimed of finding a buyer capable of guiding its crypto lending and bitcoin mining businesses out of bankruptcy.
Lastly, Celsius took additional time to consider proposals from Fahrenheit and BRIC, affiliated with the Winklevoss-owned Gemini Trust.