HomeNEWSCelsius unveils sale plan to NovaWulf

Celsius unveils sale plan to NovaWulf


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Amid its ongoing bankruptcy trial, troubled crypto lending firm, Celsius has proposed its sale to NovaWulf Digital Management. In a Wednesday filing, the firm said the sale will enable its smaller creditors with less than $5000 in their lending accounts to receive majority of their funds back. More so, larger creditors will leverage on the sale to become shareholders.

If the sale proposal is approved, NovaWulf, an investment firm founded in 2021 will begin to manage Celsius as a new entity. Worthy of note that the troubled lender received about 40 expressions of interest and nine bids before settling for NovaWulf. According to the court document, the owners of NovaWulf plans to inject $45 million to $55 million into the business. More so, they aim to add new divisions including debt cards, trade finance and private wealth services into the entity.

Meanwhile, this development comes barely a day after official committee of Celsius creditors filed a complaint against Celsius co-founder Alex Mashinsky and other executives. The committee said Mashinsky and the executives caused the collapse of the firm through their “recklessness, gross mismanagement and self-interested conduct.” In a filing submitted to the New York Bankruptcy Court, the committee said it discovered various abnormalities in the management of the crypto lender during its six months investigations of current and former directors, officers and employees.

Sidenotes of the crisis

Recall that the crypto lender had, in the wake of the bear market plunged into a financial crisis. This thus forced Celsius to halt withdrawals on its network and file for chapter 11 protection in the US court. At the first hearing, the court ordered Celsius to constitute a creditors committee. This is because it couldn’t reach a level ground on certain proposals with its customers. Then, Celsius published a debt of $4.7 billion regarding assets that belongs to customers. Still in the publication, the firm revealed that its assets are $1.2 billion below the debts. By July 14, its assets were worth about $4.3 billion, with an outstanding debt of $5.5 billion.

In September, the bankruptcy court appointed an independent examiner to probe the activities of the lender. Through this order, the examiner was mandated to investigate the tax payment procedures, and current condition of Celsius’ mining business. Meanwhile, the saga took a new twist in November after the court backed the lender to issue a deadline to customers to file their proof of claim. Notably, the firm initially set January 3 as the deadline before extending it till early February. The extension, according to Celsius, emanated to avail enough time for customers to file the claims.

Court says Celsius owns all funds deposited in its Earn network

But in January, investors in the firm’s earn program suffered a huge blow. The judge at the US court announced that Celsius owns every cryptocurrencies invested in its Earn network. This judgment gives the lender a control over about $4 billion deposited in the program by more than 600,000 users. Occasioned by this development, investors in this interest-driven program will be granted lesser priority in the repayment process.

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Dare Ibitoye
Dare Ibitoye
Over the years, Dare has been a committed reporter in the field of cryptocurrencies. He is also interested in researching about the innovative projects within the blockchain space. During his spare time, Dare loves to listen to music and read about technological trends in the contemporary world

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