NovaWulf Digital Will Acquire Bankrupt Celsius, Here’s How They Plan to Pay Their Creditors
An agreement in principle has been reached for NovaWulf Digital Management to acquire bankrupt cryptocurrency company Celsius. Out of the more than 130 bids it received during its bankruptcy case, Celsius chose NovaWulf’s offer.
As reported by Coindesk, the arrangement has been approved in principle by the company and NovaWulf, but before moving forward, the parties still require the bankruptcy court’s and the creditors’ consent.
If the proposal put out by Celsius is accepted by US Bankruptcy Judge Martin Glenn, who is overseeing Celsius’ Chapter 11 procedure, those assets would be held by Celsius creditors and managed by NovaWulf under a profit-sharing agreement. According to the proposal’s conditions, the company projects that 85% of Celsius’ clients will receive around 70% of their claims in liquid cryptocurrency.
Creditors would receive the majority of their money back in the form of BTC, ETH, and USDC if they had less than $5,000 in their lending accounts. Larger creditors will obtain tokenized shares in the new company, which will trade on the Provenance blockchain by Figure Technology through a licenced broker-dealer.
NovaWulf has agreed to contribute up to $55 million to the reformed business, which will continue the lending and bitcoin mining operations of Celsius and be held by its creditors. Court filings state that NovaWulf will receive a portion of the new company’s earnings.
After freezing consumer withdrawals, Celsius filed for US bankruptcy in July. At the time, Celsius reported having more than 1.7 million registered members and about 300,000 active users with account balances of at least $100.
The official committee of Celsius’ unsecured creditors stated in a different motion that it was attempting to recover money from the company’s former CEO Alex Mashinsky and other executives who served as the company’s leaders prior to going bankrupt.