The Wall Street Journal reported on June 24, 2022, that the titan of Wall Street, Goldman Sachs, is attempting to raise around $2 billion from investors to buy digital assets from the struggling cryptocurrency CeDeFi platform Celsius Network.
Goldman Sachs is pursuing assets from Celsius Network
It is no secret that Celsius Network has been subject to significant financial and regulatory pressure. Some yield-generating platforms, such as Celsius Network, that provide investors with competitive interest rates on their crypto deposits have been affected by the general decline in the cryptocurrency market.
According to insider sources, if Celsius declares bankruptcy, Goldman Sachs is interested in purchasing its assets at a significant discount from its market value.
Notably, Goldman Sachs is measuring interest and requesting commitments from traditional financial institutions with more than enough capital, funds specializing in distressed assets, and Web3 crypto funds.
Should Celsius Network declare bankruptcy, it will be necessary to liquidate the platform’s assets, the bulk of which are probably cryptocurrency. As a result, restructuring company Alvarez & Marsal has been hired by Celsius Network.
By May 2022, Celsius had $12 billion in assets under management and more than $8 billion in client loans. Because of “extreme market conditions,” the platform immediately declared that it would stop allowing withdrawals. The price of bitcoin fell under $20,000 shortly after the news of suspending withdrawals.
Akin Gump Strauss Hauer & Feld’s restructuring lawyers have also been retained by Celsius in addition to Alvarez & Marsal. It is noteworthy that Celsius has hired Citigroup, another powerhouse in investment banking, to provide advice on potential alternatives, including a review of a proposal from competitor crypto-assets lender Nexo.
According to persons familiar with the situation, Celsius has received bankruptcy filing recommendations from Citigroup and Akin Gump.
The current developments
As previously reported by crypto.news, Celsius engaged Akin Gump on June 14 following the announcement of an extended halt on cryptocurrency withdrawals.
Celsius is considering employing additional options, such as a custody plan, in addition to the restructuring order. A custody solution, for those who are unaware, is a separate storage and security system used to keep huge numbers of tokens. The bitcoin custody plan is the ecosystem’s most recent innovation and will bring institutional money into the sector.
Similarly, on June 22, crypto.news stated that in a letter of intent distributed earlier in the week, DeFi lending firm Chainge Finance had proposed to purchase undisclosed Celsius assets and liabilities. It is important to note that Chainge Finance’s offer to buy the assets and liabilities of Celsius is the second buyout offer the company has ever received.
Earlier, Celsius had received a takeover offer from competing cryptocurrency loan firm Nexo. After the Celsius pricing collapsed, Nexo said it is in a strong liquidity and equity position to buy any eligible Celsius assets that may still be available. Nexo specifically discussed Celsius’s collateralized loan portfolio, which is under considerable strain due to the de-peg of staked Ethereum (stETH).