Bankruptcy Court Judge Martin Glenn claims the deal may face some “regulatory roadblocks.”
Fahrenheit, a cryptocurrency consortium that includes blockchain-based venture capital firm Arrington Capita and miner US Bitcoin Corp, has emerged victorious in its bid to acquire the assets of the bankrupt crypto lender Celsius Network.
On May 25th, the court filings indicated that the acquisition includes the insolvent lender’s institutional loan portfolio, mining unit, staked cryptocurrencies, and alternative investments.
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Based on the document, Fahrenheit has to provide a $10 million deposit within three days to seal the acquisition deal.
Currently, the sale awaits regulatory approval before it can be finalized. Bankruptcy Court Judge Martin Glenn had previously warned about possible “regulatory roadblocks” similar to those experienced by other lenders’ acquisitions.
For instance, federal officials appealed Binance US’s acquisition of Voyager’s $1 billion in assets, citing the uncertain US regulatory environment, leading to the termination of the purchase.
The Blockchain Recovery Investment Consortium (BRIC), including Van Eck Absolute Return Advisers Corporation and GXD Labs LLC, secured the backup position on the Celsius acquisition deal. The favored initial bidder, NovaWulf, did not succeed in the end.
Celsius plans to publicly file a plan sponsor agreement with Fahrenheit, a backup plan sponsor agreement with the BRIC, a revised Chapter 11 plan, and a disclosure statement in the upcoming weeks. These documents are still subject to bankruptcy court approval.
Fahrenheit’s acquisition of Celsius Network’s assets signals a pivotal moment in the cryptocurrency industry’s recovery from a challenging phase marked by the downfall of several crypto exchanges, lenders, and venture capital firms. However, amid ongoing regulatory scrutiny, the successful completion of this deal remains to be seen.
The industry eagerly awaits the next developments as Celsius navigates this transition under the oversight of bankruptcy courts and regulators.
