NovaWulf Digital Management To Buy Celsius’ Lending Operations

Bankrupt cryptocurrency firm Celsius has found a buyer after reaching a deal with investment firm NovaWulf Digital Management.

• What: Crypto lending company Celsius Network has found a buyer, NovaWulf Digital Management
• Why: The deal will allow Celsius to start returning crypto assets to customers beginning June
• What next: Creditors of Celsius Earn Accounts, who are owed less than $5,000, will receive 70% recovery of their funds, with the agreement expected to set a precedent and provide a roadmap for other bankrupt crypto firms

In a bankruptcy court filing, the debtors of Celsius Network put forward a plan to sell Celsius’ liquid and illiquid assets. The plan stipulates that Celsius customers would receive a share of their liquid crypto held on the platform, including BTC and ETH. In the latest report, Celsius’s official unsecured creditors committee (UCC) backed the proposal, making it part of the general restructuring plan for the company’s retail platform and mining business. In the latest development, the company has found a buyer, digital asset investment firm NovaWulf Digital Management.

Bankrupt crypto lender Celsius finds a buyer https://t.co/zvqiFRhbPr

— Axios (@axios) February 16, 2023

NovaWulf is a good choice because “It provides the best method to distribute the Debtors’ liquid crypto assets and maximize the value of the Debtors’ illiquid assets through a new company run by experienced asset managers.” As part of the deal, NovaWulf agreed to make a direct cash contribution of between $45-55 million to a new company (one spun off from an existing company), manage it under the stewardship of a new board of directors, and will file public disclosure documents.

NovaWulf will make a direct cash contribution of $45-55mm to NewCo(1), furnish additional consideration to customers transacting on the NewCo platform to offset anticipated gas fees, and assume significant liquidation and wind down costs that would otherwise be incurred by the Debtors in a controlled liquidation of the Debtors’ business.

According to the filing, a “convenience class” of creditors of Celsius Earn Accounts, who are owed less than $5,000, will receive a 70% recovery of their funds. The compensation will be a one-time payment in BTC, ETH, or USDC stablecoin. Larger creditors will be allocated tokenized shares in the new firm to be traded on Figure Technology’s Provenance blockchain via a registered broker-dealer.

Celsius and NovaWulf agreed to the deal in principle, meaning it is subject to approval by the bankruptcy court and a majority of Celsius customers. If they agree to the terms, the lender will start returning cryptocurrency assets to customers from June. The agreement could set a precedent and provide a roadmap for other bankrupt crypto firms.

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