top of page
  • Writer's pictureConnie Chan

Bankrupt Crypto Firm Celsius Finds Buyer for Platform, Paving the Way for Restart

Bankrupt cryptocurrency lending company, Celsius, has found a buyer. The lender has reached a deal with the NovaWulf Digital Management investment company. However, this deal is still subject to approval by regulators and creditors.

🌎《Now you can collect, own and trade exclusive TNNS digital collectibles!》📈


🔥To purchase your first-edition collectibles today, click "Buy Pack" from the link above.

Bankrupt Celsius finds a lender

Celsius has made a bankruptcy court filing revealing a plan to sell the liquid and the illiquid shares of the company to NovaWulf. The investment firm has already agreed to make a direct cash contribution of between $45 million and $55 million to the new company.

Under this deal, NovaWulf estimates that 85% of the previous customers at Celsius would have a chance of recovering 70% of their claims in liquid cryptocurrencies. The creditors with claims below $5,000 will receive most of their funds, with the payout being made in the form of Bitcoin, Ether, and USD Coin.

On the other hand, the deal proposes that large creditors receive tokenized shares in the new company. The new company will also be under the leadership of a new board of directors and will file public disclosure documents. Nevertheless, the deal still needs approval from the bankruptcy court and the creditors.

The company said,

The debtors believe that the proposed agreement with NovaWulf reflects the highest and best offer that will maximize the value of the debtors’ assets. Over the coming days, the debtors and their advisors will work with the committee and NovaWulf to finalize a binding agreement, at which point the debtors will cancel the auction and designate NovaWulf as the successful bidder.

Celsius misused customer funds

Celsius filed for bankruptcy mid-last year following the collapse of Terra. A report published earlier this month said that the lender had misused customer funds by using them to support the value of the company’s native token known as CEL.

According to the report, the Celsius executives, including the company’s CEO, Alex Mashinsky, traded a large volume of their CEL holdings. These executives also placed “resting” orders on their trades to manage any price declines.

Mashinsky is already facing a lawsuit filed by the New York attorney general. The lawsuit claims that the Celsius CEO engaged in fraud while running Celsius. It further claims that Mashinsky misled investors about the company’s situation, leading to millions of dollars in losses.

Days before halting withdrawals, Mashinsky had assured Celsius users that the lending platform had ample liquidity.

The official committee for the unsecured creditors at Celsius filed another motion saying they wanted to recover funds from Mashinsky and other executives in charge of the company before the bankruptcy filing.

🌎《Now you can collect, own and trade exclusive TNNS digital collectibles!》📈


🔥To purchase your first-edition collectibles today, click "Buy Pack" from the link above.

The motion said that these executives were “negligent” and “reckless,” which led to the company’s over $1 billion loss in just one year. The creditors also said that the executives mismanaged the company as they could not account for all assets and liabilities. The motion wants the reorganization plan for the company to have a litigation trust that will sue Mashinsky and other executives.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

bottom of page