Crypto firm Celsius Network has suspended fund withdrawals and other transactions since June 12 and questions about its future persist.
Nearly three weeks after Celsius Network suspended fund withdrawals and other operations from its platform, questions about its future are mounting.
The maneuvers behind the scenes are also increasing. The crypto firm has hired Alavarez & Marsal, a restructuring advisory firm. Celsius has tapped restructuring attorneys from law firm Akin Gump Strauss Hauer & Feld.
But the most interesting news is that Goldman Sachs (GS) – Get Goldman Sachs Group Inc. (The) Report is trying to raise $2 billion from investors to buy distressed Celsius assets, according to Fortune and Coindesk.
Clearly the goal is to allow investors to buy Celsius’s assets at a low price in the event of the firm’s bankruptcy.
According to Fortune, which cites anonymous sources familiar with the matter, Goldman Sachs has solicited crypto firms and web 3 firms, the new iteration of the internet, as well as traditional financial institutions and companies specializing in restructuring.
Goldman Sachs did not immediately respond to a request for comment.
Another Offer Is on the Table
On June 12, Celsius announced that it would suspend indefinitely various transactions, including withdrawals of funds “due to extreme market conditions.”
“Today we are announcing that Celsius is pausing all withdrawals, Swap, and transfers between accounts,” the company said at the time. “We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations.”
Celsius is a cryptocurrency lending platform. The company allows anyone to borrow cryptocurrency and earn interest for lenders. “Earn high. Borrow low. Change the world,” the firm says on its website. One of its catch phrases is “Borrow like a Billionaire.”
Celsius, through its CEL token, promises “financial rewards” as much as 30% extra returns weekly. But some options are not available to U.S. based users.
When it raised $400 million last October from investors led by WestCap and Canadian Caisse de dépôt du Québec (CDPQ), Celsius Network saw its valuation soar to $3 billion. The company wants to be an intermediary between traditional finance and the sphere of cryptocurrencies.
The firm, which operates like a traditional bank, had more than $8.20 billion loaned out to clients, $11.82 billion in assets under management and had more than 2 million customers as of May 17 of this year, according to its website.
Celsius has over 200 employees working across offices in New Jersey, London, Tel Aviv, Cyprus, and Serbia, the firm also claimed.
Long before Goldman Sachs, the crypto firm Nexo AG has already offered to buy the distressed assets of Celsius.
“After what appears to be the insolvency of @CelsiusNetwork and mindful of the repercussions for their retail investors & the crypto community, Nexo has extended a formal offer to acquire qualifying assets of @CelsiusNetwork after their withdrawal freeze,” the firm wrote on Twitter, with a link to the letter sent to Celsius.
“Nexo’s underlying sustainable business model has allowed it to maintain financial stability in any market circumstances and as a result, the company is in a solid liquidity and equity position to help mitigate the consequences of Celsius’ distressed state,” the potential buyer wrote in its letter of intent.
Citigroup has also been enlisted by Celsius to advise on possible solutions, The Block reported.
Citigroup and Akin Gump have both recommended Celsius file for bankruptcy, the reports say.
Except for a flat message on June 19, Celsius has remained silent so far.
“We want our community to know that our objective continues to be stabilizing our liquidity and operations,” the firm said. “This process will take time.”
“We are pausing our Twitter Spaces and AMAs to focus on navigating these unprecedented challenges and seeking to fulfill our responsibilities to our community.”
The Celsius network’s financial troubles helped undermine investor confidence in the crypto industry, accelerating the market crash a few days ago before it stabilized somewhat.
