Celsius Network’s Crypto Assets: Leaked Bids from Binance, Galaxy Digital, and Others Spark Transparency Concerns

The Celsius Network saga continues to unfold, and the latest chapter involves leaked information revealing potential bids for its crypto assets. Crypto blogger Tiffany Fong, known for her insightful coverage of the Celsius situation, has dropped a bombshell, sharing details of bids from at least five firms, including industry giants like Binance and Galaxy Digital. But are these bids a lifeline for creditors, or just another twist in the tale? Let’s dive into what we know.

Who are the Bidders for Celsius’s Crypto Assets?

According to Tiffany Fong, the firms vying for Celsius’s crypto assets include some well-known names in the crypto space:

• Binance: A leading global cryptocurrency exchange.
• Bank To The Future: An online investment platform with a focus on fintech and crypto.
• Galaxy Digital: A digital asset investment management firm founded by Michael Novogratz.
• Cumberland DRW: A crypto trading company, part of DRW, a diversified trading firm.
• NovaWulf: A digital asset investment firm.

Fong, who gained prominence for her interviews with Sam Bankman-Fried after Celsius’s troubles surfaced, claims to have obtained documents dated December 20 detailing these bids. Her decision to leak this information wasn’t taken lightly. Initially, she held back to avoid disrupting the bidding process. So, what changed her mind?

Why Leak the Bids Now?

Fong explained in her Substack post that recent comments from a lawyer representing Celsius spurred her to go public. During a Celsius Network court hearing on January 24th, a Kirkland & Ellis attorney, Ross M. Kwasteniet, reportedly stated that the bids were “not compelling.”

This statement seems to have been the tipping point for Fong. As she articulated:

“I refrained from sharing the bids publicly to avoid disrupting the bidding procedures or negatively impacting customer recoveries; however, in yesterday’s Celsius Network court hearing (1/24/23), Kirkland & Ellis attorney Ross M. Kwasteniet proclaimed the bids ‘have not been compelling,” Fong explained.

Essentially, if the bids are being deemed uncompelling by Celsius’s own legal team, Fong seems to believe that creditors and the public deserve to know what’s on the table.

What Do the Bids Reveal?

Fong indicates these proposals were submitted in November 2022 and are largely “abandoned.” Let’s break down some of the key details from the leaked bids:

• Binance’s Bid: Reportedly offered $15 million, with a proposed split of $12 million for the Celsius estate and $3 million for “migrated users” on a pro-rata basis. Binance aimed to acquire and transfer “all liquid and certain illiquid crypto” at fair market value to its platform.
• Galaxy Digital’s Bid: Proposed approximately $67 million for all illiquid and staked Ethereum assets, positioning themselves as a “stalking horse bidder.” This designation is usually given to an initial bidder in distressed asset sales, setting a benchmark for other offers.
• Bank To The Future’s Bid: Focused on returning all liquid crypto assets and collateral to creditors pro rata, managed by Bank To The Future. Simon Dixon, CEO of Bank To The Future, confirmed the details of their bid via Twitter on January 26th, adding credibility to the leaked information.
• NovaWulf’s Bid: Fong found NovaWulf’s bid “particularly interesting” due to its resemblance to Celsius Network’s newly proposed restructuring plans. This could suggest a potential alignment or perhaps influence on Celsius’s internal strategy.

It’s important to note that Fong stated she is “only aware of these five bids” for Celsius’s crypto assets. Are there other offers out there? Are these bids truly “abandoned” as she suggests?

Transparency Concerns and Creditor Awareness

One of the most concerning aspects highlighted by Fong’s leak is the apparent lack of transparency surrounding these bids. She mentioned speaking with “multiple Celsius Network employees” and was surprised to learn that most, even in upper management, were unaware of these bids.

This raises significant questions:

• Why were employees kept in the dark?
• If employees were unaware, what about the creditors – the individuals and entities with funds locked up in Celsius?

Fong emphasizes that creditors, and even most employees, were in the dark about these bids for assets that rightfully belong to investors who deposited them on the platform. This lack of communication and transparency can understandably fuel frustration and anxiety among those affected by the Celsius collapse.

What’s Next for Celsius and its Creditors?

The future remains uncertain. Fong herself admits she’s unsure how “things will unfold.” However, her core belief is clear: creditors deserve “more transparency” and the right to see the bids for the assets they entrusted to Celsius.

Cointelegraph reached out to Binance, Galaxy Digital, BnkToTheFuture, NovaWulf, and Cumberland DRW for comments, but as of now, there’s no indication of their responses.

Key Takeaways

Here’s a summary of the key points to consider:

• Leaked Bids: Information shared by Tiffany Fong reveals bids from Binance, Galaxy Digital, Bank To The Future, Cumberland DRW, and NovaWulf for Celsius Network’s crypto assets.
• Low Offers: At least some of the bids, like Binance’s $15 million offer, appear relatively low, especially considering the scale of Celsius’s assets and liabilities.
• Transparency Issues: There’s a significant lack of transparency, with even Celsius employees and creditors reportedly unaware of these bids.
• Creditor Concerns: The revelation of potentially low and undisclosed bids raises concerns about whether creditors will receive fair compensation in the bankruptcy proceedings.
• Ongoing Uncertainty: The situation remains fluid, and the ultimate outcome for Celsius creditors is still unclear.

The Celsius Network saga is a stark reminder of the risks inherent in the crypto space and the critical importance of transparency, especially during times of financial distress. As this story develops, the focus must remain on ensuring fairness and maximizing recovery for Celsius creditors who have been significantly impacted by this crisis.