Celsius Network Seeks Additional Bids Amid Bankruptcy Proceedings

Celsius Network's Bankruptcy Developments

Celsius Network, a bankrupt crypto lender, is actively exploring potential buyers while having an existing offer from NovaWulf Digital Management. The company, alongside its creditors' committee, recently engaged with another prospective buyer to assess an alternative proposal. This strategic move signifies Celsius's openness to better offers, indicating a proactive approach to optimizing its bankruptcy resolution.

Restructuring Plans and Court Proceedings

In a recent bankruptcy court hearing in Manhattan, Celsius requested additional time to refine its restructuring plan centered on NovaWulf's offer. The New Jersey-based lender aims to implement a strategy that involves cashing out customers with crypto deposits under $5,000 and transferring ownership of remaining assets to holders of larger accounts. U.S. bankruptcy judge Martin Glenn granted Celsius an additional three weeks to submit their Chapter 11 plan, facilitating a potential bankruptcy exit by June.

Potential Breakup Fees and Market Context

Should Celsius opt for an alternate bidder, the company plans to compensate NovaWulf with up to $20 million in breakup fees. This arrangement underscores the foundational role NovaWulf's offer plays in establishing a competitive bidding environment. The exploration of other bids is partly driven by the downturn in the crypto lending sector, which saw significant growth during the COVID-19 pandemic but faced numerous bankruptcies in 2022, including Celsius's own filing in July after halting customer withdrawals.

Celsius's User Base and Market Impact

At the time of its bankruptcy filing, Celsius reported over 1.7 million registered users, with approximately 300,000 active accounts exceeding $100 in balance. The company's current efforts to explore additional bids highlight its commitment to securing the best possible outcome for its stakeholders amidst challenging market conditions.