Insolvent Celsius Network Sets Date for Asset Auction

October 4, 2022

MCP News Free

Insolvent Celsius Network Sets Date for Asset Auction

As per October 3 court filing, bankrupt Celsius Network has set the deadline date for the much-anticipated asset auction to October 17.

In a report by Bloomberg, the troubled crypto lender submitted an auction plan to the United States Bankruptcy Court for the Southern District of New York on October 3.

According to the filing, the deadline has been set to October 17, 4 pm for any bid to be submitted, and possibly, the auctioning plan will be executed by 10 am October 20.

Last night, following extensive dialogue with UCC, Celsius filed procedures for investors/buyers can submit bids for the company’s business. Court hearing is 10/20. We continue to also evaluate how Celsius may reorganize itself on its own w/o external partners.
— Celsius Official Committee of Unsecured Creditors (@CelsiusUcc) September 30, 2022

Celsius paused withdrawals on its platform in June citing extreme market conditions and the following month, it filed for bankruptcy for protection against creditors.

However, recent court documents revealed that the lending firm’s liabilities were more than $6.7 billion and its assets were worth only around $3.9 billion, resulting in a balance sheet hole of $2.8 billion.

In the midst of all these, the firm’s ex-CEO, and co-founder, Alex Mashinsky resigned as Celsius CEO, also, a recent report revealed that he took out $10 million from his Celsius account in May, before pausing withdrawals in June, raising more concern about the allegation by crypto critics that the firm was running a Ponzi scheme using Celsius Network.

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Bidders Leading the Race

As Celsius Network plans and sets a deadline for the auctioning of its asset, there have repeatedly been many bids from investors in the crypto space.

One of the leading investors reported to have been leading the race is FTX’s Sam Bankman-Fried who is known to have been taking advantage of the current crypto crash by acquiring sinking crypto firms. Last week, it won the auction race for the insolvent crypto lender Voyager Digital in a bid of around $1.4 billion.

Also, Goldman Sachs is one of the financial institutions in competition for the auctioning race as it is looking to raise about $2 billion from investors to buy Celsius at a discount.

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