Due to the general condition in the crypto market, several yield-generating platforms that offer investor attractive interest payments on their crypto deposits has been engulfed including Celsius Network.
As reported by the closer sources to the matter, Goldman Sachs is interested in buying Celsius’ assets at a massive discount to the market price if the platform files for bankruptcy.
Goldman is gauging profit and seeking commitments from web3 crypto funds, funds specializing in distressed assets, and traditional financial institutions with over sufficient cash on hand.
Filing Celsius for bankruptcy will result in selling the majority of assets deposited with the platform which are likely cryptocurrencies cheap, in this same vein, Celsius Network has taken the services of restructuring firm Alvarez and Marsal.
How It Begins
As of May, the Celsius platform has announced that it would stop withdrawals from its platform because of “extreme market conditions.” Soon after the announcement of pausing withdrawals, bitcoin’s price crashed below $20,000 as the Celius had over $8 billion lent out to clients and $12 billion in assets under management.
Alongside hiring Alvarez and Marsal, Celsius Network has connected to the service of restructuring attorneys from the law company Akin Gump Strauss Hauer and Feld. Another investment banking titan Citigroup has been enlisted by Celsius to advise on possible solutions, including an assessment of an offer from rival crypto-assets lender Nexo. Both Citigroup and Akin Gump have recommended Celsius Network for Bankruptcy according to the closed source.
Celsius Network is considering a custody plan in addition to the restructuring order alternatively.
For the uninitiated, a custody solution is an independent storage and security system used to hold huge quantities of tokens. The crypto custody plan is the latest innovation in the ecosystem and will herald institutional capital into the industry.
Initially, rival crypto lending platform Nexo had made an acquisition bid for Celsius. Following the Celsius price crash, Nexo announced it is in a strong liquidity and equity position to acquire any remaining qualified Celsius assets. Nexo especially talked about Celsius’s collateralized loan portfolio, which is under a lot of pressure because staked Ethereum (stETH) was de-pegged.
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A couple of months ago, Goldman Sachs boss David Solomon had a closed-door meeting with FXT founder Sam Bankman-Fried in the Caribbean in March. The hallmark of the meeting was to forge closer ties between one of the largest banks and the upstart cryptocurrency exchange.
According to people familiar with the matter, the discussion was mainly aimed at regulatory issues in the U.S. Goldman is willing to aid FTX to engage with American regulatory agencies, including the Commodity Futures Trading Commission (CFTC).