Fahrenheit to take over Celsius
- Reference: 1685078955
- News link: https://www.theregister.co.uk/2023/05/26/fahrenheit_to_take_over_celsius/
- Source link:
Celsius [1]filed for bankruptcy in July 2022 – a month after it froze all transactions, and at a time when the crypto sector was [2]rocked by trouble at big players Terraform Labs and Binance.
A late January court-appointed investigation [3]concluded that the business model Celsius promoted was not the one it operated. Celsius also concealed from investors that the initial coin offering (ICO) of its CEL tokens failed to meet its $50 million earnings target. Furthermore, former CEO Alex Mashinsky promised to buy the unsold tokens from the ICO, but never followed through. The company then propped up its token by purchasing it itself, unbeknownst to customers.
[4]
The auction to find a buyer for the frozen crypto lending and mining business began April 22.
[5]
[6]
Fahrenheit will provide the capital, management team, and technology to establish a new company – NewCo – [7]announced Celsius on Thursday.
The purchase is contingent on a $10 million deposit and regulatory approval. Members of the acquisition consortium include Arrington Capital, US Bitcoin Corp., Proof Group, Steven Kokinos and Ravi Kaza.
[8]Bankruptcy probe: Celsius cheated investors 'from the start'
[9]EU passes world's first regulatory framework for cryptocurrency
[10]Ads for lucrative jobs in Asia fail to mention chance of slavery as crypto-scammer
[11]Inside FTX: Jokes about misplaced funds, diabolical IT, poor oversight, and worse
NewCo will receive cryptocurrency estimated between $450 million and $500 million and must "meaningfully distribute" the alterna-cash to Celsius account holders.
Celsius said account holders will own 100 percent of the equity in NewCo. NewCo's management team, however, will receive $35 million per year in management fees.
[12]
"The winning bid also provides attractive offers for Celsius to immediately energize its mining rigs that are currently inactive and for NewCo to build its mining business over time," said Celsius.
Blockchain Recovery Investment Consortium (BRIC) was chosen as a "backup bid," should it be required for "any reason." BRIC is a holding company backed by the Winklevoss twins' Gemini Trust, Van Eck Absolute Return Advisers Corporation, and Global X Digital. ®
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[1] https://www.theregister.com/2022/07/14/frozen_cryptocurrency_lending_biz_celsius/
[2] https://www.theregister.com/2022/12/23/crypto_craziness_craps_out/
[3] https://www.theregister.com/2023/02/01/celsius_bankruptcy_ponzi/
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZHCDRftzi0zfvUXUG3Z8ZgAAAMg&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZHCDRftzi0zfvUXUG3Z8ZgAAAMg&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZHCDRftzi0zfvUXUG3Z8ZgAAAMg&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[7] https://www.businesswire.com/news/home/20230525005382/en/Celsius-Announces-Fahrenheit-LLC-as-Winning-Bidder-to-Manage-New-Entity-to-Be-Owned-by-Celsius-Creditors
[8] https://www.theregister.com/2023/02/01/celsius_bankruptcy_ponzi/
[9] https://www.theregister.com/2023/05/17/eu_passes_cryptocurrency_regs/
[10] https://www.theregister.com/2023/05/23/fbi_warns_on_asian_jobs/
[11] https://www.theregister.com/2023/04/10/ftx_liquidators_report/
[12] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZHCDRftzi0zfvUXUG3Z8ZgAAAMg&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[13] https://whitepapers.theregister.com/
Re: Byline
NOTE TO SELF: When I launch my cryptocurrency investment vehicle I must remember to name it after Monsieur Réaumur.
NewCo's management team, however, will receive $35 million per year in management fees.
Nice work if you can get it...
In what world does a company with an Asset register of €500 million, spend 7% of that EVERY year paying their management? And the Asset register is NOT an indicator of the actual profit that will be generated from those assets. I look forward to seeing how quickly the Management can strip all of the profits and a large amount of the assets before folding the company in a few years time. My guess is 3 years....
Charles Ponzi born 100 year too early.
"The company then propped up its token by purchasing it itself, unbeknownst to customers."
Only a stone's throw from being a ponzi scheme I would have thought?
When you read the list corporate names involved it looks more like an April 1st joke.
Re: Charles Ponzi born 100 year too early.
A "cryptocurrency lender" sounds more like a PT Barnum idea.
Re: Charles Ponzi born 100 year too early.
I have some recently used Tulip bulbs for sale at a reduced price ... just saying.
Re: Charles Ponzi born 100 year too early.
"recently used Tulip bulbs..."
I'm not aware of the horticultural details, but surely a tulip bulb is actually a type of investment that can, with the proper gardening, multiply itself many times over??
Re: Charles Ponzi born 100 year too early.
It's an allusion to the first (?) recorded speculative bubble, the dutch [1]Tulip Mania .
[1] https://en.wikipedia.org/wiki/Tulip_mania
Re: Charles Ponzi born 100 year too early.
"propped up its token by purchasing it itself"
Standard wall street practice to keep share price up!!
Byline
This is where I wish [1]Kelvin Mackenzie were on El Reg 's staff, so the by-line would be "as reported by Kelvin".
[1] https://en.wikipedia.org/wiki/Kelvin_MacKenzie