Crypto lending platform Celsius has chosen to partner with Fahrenheit for their bankruptcy exit. Celsius, a company that provides loans and interest-bearing accounts for cryptocurrency holders, has agreed to acquire Fahrenheit, a firm that offers similar services. The two companies will merge and rebrand under the Celsius name.
The move comes as a surprise to many, as Celsius was not among the initial suitors for Fahrenheit when it declared bankruptcy earlier this year. However, Celsius CEO Alex Mashinsky believes that the acquisition will bring significant benefits to both companies.
“Fahrenheit has a great team and technology, and we think that their expertise in the lending space will be a huge asset to Celsius,” Mashinsky said in a statement. “We are excited to work together and continue to provide our customers with the best possible service.”
The deal is subject to approval by the bankruptcy court overseeing Fahrenheit’s proceedings. If approved, the acquisition will allow Celsius to expand its reach and offer more services to its customers.
According to Mashinsky, the acquisition will also help Celsius further its mission of providing financial services to the unbanked and underbanked.
“We are passionate about bringing financial freedom to everyone, and we believe that this partnership with Fahrenheit will help us achieve that goal,” he said.
Fahrenheit’s CEO, Mark Dorman, echoed Mashinsky’s sentiments.
“We are thrilled to be joining forces with Celsius and to be part of their mission to democratize finance,” Dorman said. “We believe that our technology, combined with Celsius’ expertise in the crypto lending space, will create a truly exceptional platform for our customers.”
The acquisition is just the latest move in Celsius’ rapid expansion. The company has seen significant growth over the past year, with its user base increasing from around 100,000 to over 700,000. Celsius has also raised over $200 million in funding and is reportedly on track to reach $10 billion in assets under management.
The company’s success can be attributed to its unique business model, which rewards customers for holding cryptocurrencies with interest rates that are often higher than those offered by traditional banks. Celsius also offers loans to its customers, allowing them to borrow against their cryptocurrency holdings without having to sell them.
The addition of Fahrenheit’s technology and expertise in the lending space will only strengthen Celsius’ position in the market. The two companies share a commitment to providing innovative financial services to their customers, and the merger will allow them to combine their strengths and offer an even better product.
The acquisition is also a win for Fahrenheit, which was struggling with financial difficulties before filing for bankruptcy earlier this year. The company had raised over $6.5 million in funding but was unable to turn a profit. The merger with Celsius will allow Fahrenheit to continue offering its services to its customers while also benefiting from Celsius’ resources and expertise.
Overall, the acquisition of Fahrenheit by Celsius is a positive development for both companies and their customers. The merger will allow them to combine their strengths and continue to innovate in the crypto lending space. It is a testament to the resilience and adaptability of the cryptocurrency industry and its ability to weather challenges and emerge stronger.
Bankrupt crypto lender Celsius Network LLC has selected Fahrenheit’s proposal as the winning bid to create a new entity owned by its creditors. This move would direct the company out of bankruptcy. Fahrenheit, which includes blockchain-based venture capital firm Arrington Capital, will provide the capital, management team, and technology to establish and operate the new company.
According to Celsius, account holders will own 100% of the new equity in the new company. The new board of directors overseeing the new company will be appointed by the creditors, with the majority representing creditors.
Celsius also mentioned that it secured a backup bid with the Blockchain Recovery Investment Consortium (BRIC), a holding company affiliated with Gemini Trust, which is owned by the Winklevoss twins. Celsius filed for Chapter 11 protection in July. Other crypto lenders, too, have declared bankruptcy following the massive growth of the industry during the COVID pandemic.
Celsius initiated an auction on April 22 to find a buyer who would guide its crypto lending and bitcoin mining businesses out of bankruptcy. The company intended to approve NovaWulf’s offer but delayed its decision to obtain additional offers from Fahrenheit and BRIC.
Fahrenheit’s selection demonstrates that Celsius has confidence in the company’s capabilities to revive its operations successfully. Celsius’s token holders will own 100% of the new company’s equity, so the choice of the right operating partner is crucial.
Celsius was established in 2017 and claims to have 1.2 million customers worldwide, with assets of $10.1 billion in cryptocurrency deposits and $14.4 billion in cryptocurrency loans at the time of its bankruptcy filing. Celsius is only one of many crypto companies that have gone bankrupt in the last year, signaling regulatory and legal troubles in the space.
In conclusion, Celsius Network LLC’s selection of Fahrenheit’s proposal to manage a new entity is a significant milestone in the cryptocurrency industry. The move demonstrates the faith and trust investors have in the space. However, the crypto industry remains highly speculative and risky, with companies going bankrupt frequently.
