Fahrenheit Wins Bid for Bankrupt Celsius, Will Acquire up to $500M in Liquid Crypto

The Fahrenheit Consortium beat out competing offers from Novawulf and BRIC

May 25, 2023 10:56 am

LightField Studios/Shutterstock modified by Blockworks

The Fahrenheit Consortium has officially won the bidding process to acquire crypto lender Celsius, which filed for bankruptcy in July 2022.

Fahrenheit, which is made up of equity owners Arrington Capital, US Bitcoin Corp and investment firm Proof Group Capital Management, will need to put down a $10 million deposit in cash within three business days to lock down the sale, according to court documents filed on May 25.

Fahrenheit will take control of $450 million to $500 million worth of liquid crypto as a result of the deal. It will also subsume Celsius’ institutional loan portfolio, its crypto staked on DeFi protocols, and its mining operations, which US Bitcoin will manage.

Newsletter

Subscribe to The Breakdown

Additionally, US Bitcoin will build and be responsible for energizing a new 100 megawatt bitcoin mining facility, per the filing.

Celsius initiated the bidding process over a month ago. At the time, the leading candidate was Novawulf; the investment firm that managed the bankruptcy process.

A week ago, though, Fahrenheit overtook competing bids from Novawulf and Blockchain Recovery Investment Committee (BRIC). BRIC did however submit a qualifying bid, according to the filing.

Even though Celsius and the creditors have signed off on the acquisition, it is possible that US regulators may intervene at some point. In a document submitted back in October 2022, US Bankruptcy Judge Martin Glenn said there are no precedents with crypto related cases, such as Celsius’ bankruptcy proceedings.

“Many, or [perhaps] most, cases involving cryptocurrency may raise legal issues for which there are no controlling legal precedents in this Circuit or elsewhere in the United States or in other countries in which cases arise,” Glenn wrote.

Blockworks reported in July 2022 that Celsius had a $1.7 billion hole to fill. As such, the company had $5.5 billion in liabilities and $4.3 billion in assets at the time.

Get the news in your inbox. Explore Blockworks newsletters:

The Breakdown: Decoding crypto and the markets. Daily.
0xResearch: Alpha in your inbox. Think like an analyst.

Tags

Newsletter

The Breakdown

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Digital Asset Summit 2026

Javits Center North | 445 11th Ave

Tues - Thurs, March 24 - 26, 2026

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

buy tickets learn more

recent research

Research

Kinetiq Protocol: From LST Infrastructure to HIP-3 Deployer

Kinetiq has established itself as Hyperliquid's dominant liquid staking protocol, holding 82.5% of LST market share with $610M in TVL. The protocol is now expanding beyond its kHYPE staking core into higher take-rate verticals: iHYPE for institutional custody rails, Launch for HIP-3 capital formation, and Markets for builder-deployed perpetuals. We view Markets, launching Jan. 12, as the highest-potential product line given its mechanically scalable, activity-linked unit economics. Near-term revenue remains anchored by kHYPE's KIP-2 fee schedule (~$1.6M annualized), while Markets provides embedded optionality if HIP-3 economics normalize post-Growth Mode. KNTQ's setup is relatively clean: zero insider unlocks until November 2026, 6.2% buyback yield from staking revenue, and cleared airdrop overhang. Risks center on unproven Markets execution, declining kHYPE TVL despite ongoing incentives, and competition from Hyperliquid's native initiatives.

by Shaunda Devens