Goldman Sachs Is Leading Investor Group To Buy Celsius Network• June 26, 2022 4:50 pm • Comments
Celsius Network has gathered much attention from the crypto industry after it announced that it would freeze all withdrawals which indicated financial troubles that the firm may be facing.
Sources have reported that the firm has been seeking advisors for a restructuring of the firm which has alarmed many investors who may not be able to get back their assets.
During this time, Goldman Sachs has been raising roughly $2 billion from investors to buy up the distressed assets from Celsius.
Essentially, this would allow Goldman Sachs to acquire all of the firm’s assets at major discount prices if the firm actually does file for bankruptcy.
SCOOP: @GoldmanSachs is looking to raise $2 billion from crypto funds, vulture investors and other financial institutions to buy up @CelsiusNetwork assets in the event of a bankruptcy. @0x_bae reportshttps://t.co/dXq7TccbGW
— CoinDesk (@CoinDesk) June 24, 2022
Goldman Sachs appears to be gauging interest and soliciting commitments from Web3 crypto funds, funds specializing in distressed assets and traditional financial institutions with ample cash on hand, according to a person familiar with the situation.
The assets, most likely cryptocurrencies having to be sold on the cheap, would then likely be managed by participants in the fundraising push.
Celsius has tapped restructuring advisory firm Alvarez & Marsal, the Wall Street Journal reported Friday afternoon.
Goldman Sachs did not respond to a request for comment.
Celsius, which had more than $8 billion lent out to clients and $12 billion in assets under management as of May of this year, abruptly announced on June 12 that it would stop withdrawals from its platform, citing “extreme market conditions.”
The disclosure exacerbated those conditions, briefly sending bitcoin’s price below $20,000.
Celsius has not been the only crypto business that has been suffering from the recent crypto market downturn as many projects have been struggling to stay afloat.
Layoffs seem widespread in the crypto business in recent months with the exception of a few big players such as Ripple who continues to expand and hire new talent.
Celsius had reached out for restructuring attorneys from law firms earlier and inside sources are reporting that the advice they got may be to file for bankruptcy.
Of course, CitiGroup and the law firm Akin Gump have remained silent and did not provide any official confirmation regarding the matter which made investors more concerned.
Celsius locked your Bitcoin so Goldman could buy them at a discount.https://t.co/0oIbcaB22Y
— Joe Burnett (🔑)³ (@IIICapital) June 25, 2022
Celsius, which ran $12 billion in May, has been on the brink of insolvency since the firm abruptly said it would halt all withdrawals from its platform earlier this month. In the event of a bankruptcy proceeding, customers would be considered unsecured creditors — and thus far down the list in terms of recouping their assets.
“Goldman didn’t want to buy into the top of the market,” one source said. “This is more their style.”
The source drew a parallel between the woes of star stock trader Gabe Plotkin’s now-shuttered Melvin Capital, which took an emergency cash infusion from Steve Cohen’s Point72 Asset Management and Ken Griffin’s Citadel.
Whatever the case, it seems that a lot of players in the crypto space will be bought out by the larger players due to the economic downturn while the bigger projects will truly shine.
!Alpha: Goldman Sachs is looking to raise $2 billion from investors to buy up distressed assets from troubled crypto lender #Celsius.
The deal would allow investors to buy up Celsius’ assets at discounts in the event of a bankruptcy filing.@GoldmanSachs
The 🍌🐀 was here. pic.twitter.com/FuElPLMjHo
— The🍌🐀 (Maritime Vintage) (@MaritimeVintage) June 24, 2022
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