An auction for bankrupt cryptocurrency firm Celsius Network has reportedly drawn two active bidders.
Competing groups backed by Apollo Global Management and senior executives at Fortress Investment Group have been submitting bids for several weeks and are each now offering about $50 million to restart Celsius’ operations with new management, The Wall Street Journal (WSJ) reported Thursday (May 18), citing unnamed sources and investor presentations.
Apollo Global Management and Fortress Investment Group did not immediately reply to PYMNTS’ request for comment.
Under the proposals of the two competing groups, Celsius would be a publicly traded company owned mostly by its creditors, as 600,000 creditors deposited crypto with the firm, according to the WSJ report.
Both groups are interested in increasing the firm’s businesses involved in crypto mining and in using crypto holdings to process and verify transactions, and neither is interested in immediately restarting its consumer lending business, the report said.
Apollo’s participation in the bid is notable because traditional finance giants like Apollo have generally not looked to buy the assets of the players in the crypto industry that have gone bankrupt over the past year.
Celsius Network filed for Chapter 11 bankruptcy protection July 13, a month after it had frozen customer accounts.
The company had been offering big yields to crypto depositors while making big loans that were backed by insufficient collateral — leaving it vulnerable to a market downturn — and then froze withdrawals, swaps and transfers in June to prevent a run and losses to customers before filing for bankruptcy in July.
It was reported in December that Celsius Network had received bids for its retail platform, its crypto mining business and a combination of both.
A company presentation introduced in court at the time showed that the company’s crypto-mining operations were generating positive operating cash flow and that Celsius Network was continuing to build out those operations.
In February, a bankruptcy court filing said some customers can withdraw funds from Celsius, assuming that the users meet specific criteria.
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