Fahrenheit to take over Celsius
0°C×9/5+32 = how much money to thaw frozen crypto accounts?
New Jersey-based cryptocurrency lender Celsius Network has announced it will be bought by a consortium called Fahrenheit.
Celsius filed for bankruptcy in July 2022 – a month after it froze all transactions, and at a time when the crypto sector was rocked by trouble at big players Terraform Labs and Binance.
A late January court-appointed investigation concluded that the business model Celsius promoted was not the one it operated. Celsius also concealed from investors that the initial coin offering (ICO) of its CEL tokens failed to meet its $50 million earnings target. Furthermore, former CEO Alex Mashinsky promised to buy the unsold tokens from the ICO, but never followed through. The company then propped up its token by purchasing it itself, unbeknownst to customers.
The auction to find a buyer for the frozen crypto lending and mining business began April 22.
Fahrenheit will provide the capital, management team, and technology to establish a new company – NewCo – announced Celsius on Thursday.
The purchase is contingent on a $10 million deposit and regulatory approval. Members of the acquisition consortium include Arrington Capital, US Bitcoin Corp., Proof Group, Steven Kokinos and Ravi Kaza.
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NewCo will receive cryptocurrency estimated between $450 million and $500 million and must "meaningfully distribute" the alterna-cash to Celsius account holders.
Celsius said account holders will own 100 percent of the equity in NewCo. NewCo's management team, however, will receive $35 million per year in management fees.
"The winning bid also provides attractive offers for Celsius to immediately energize its mining rigs that are currently inactive and for NewCo to build its mining business over time," said Celsius.
Blockchain Recovery Investment Consortium (BRIC) was chosen as a "backup bid," should it be required for "any reason." BRIC is a holding company backed by the Winklevoss twins' Gemini Trust, Van Eck Absolute Return Advisers Corporation, and Global X Digital. ®