Crypto asset manager Pantera Capital has reportedly won a bid to purchase discounted Solana (SOL) from bankrupt crypto exchange platform FTX. According to a new report by Bloomberg, an anonymous person familiar with the matter says that Pantera won a bid to purchase a discounted stash of the Ethereum (ETH) rival. Though the details of […]
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After Credit Suisse Group AG announced it would borrow 50 billion Swiss francs from the Swiss National Bank, UBS Group AG is reportedly considering acquiring the banking giant. However, UBS is requesting that the government issue a backstop to protect against any losses if it purchases Credit Suisse. According to unnamed sources familiar with the […]
The Celsius Official Committee of Unsecured Creditors hosted a two-hour town hall shortly after the filing of the Celsius examiners’ report.
The counsel representing Celsius’ official creditor committee has denied assertions that the bids for Celsius’ crypto assets have been rejected.
During a Jan. 31 Twitter Space “town hall” following the examiner’s report on Celsius, attorneys from White & Case LLP including Gregory Pesce and Aaron Colodny addressed the so-called “leaked” bids for Celsius’ crypto assets shared by crypto blogger Tiffany Fong.
“The assertion that the bids have been rejected is just categorically false,” said Pesce.
— Celsius Official Committee of Unsecured Creditors (@CelsiusUcc) January 31, 2023
Fong’s Jan. 27 post on Substack pointed to at least five firms that were reportedly interested in bidding on Celsius’ crypto assets including Binance, Bank To The Future, Galaxy Digital, crypto trading company Cumberland DRW and digital asset investment firm NovaWulf.
At the time Fong said the bids were “for the most part, abandoned” — referring to an earlier statement from a Celsius lawyer proclaiming the bids they received so far “have not been compelling.”
However, the Celsius Official Committee of Unsecured Creditors (UCC) attorney argued that this was not the case.
“The bids have not been rejected. That’s just wrong, and I hope I can disabuse people of that incorrect notion today."
The attorney refrained from confirming whether bids mentioned in the leak were accurate or not but said it was “regrettable” as it reduces the flexibility the committee has in the negotiation process.
“Every day, we and the debtors are providing public messages and private messages to potential investors about where they stand in the process,” explained Pesce.
“The messages that we sent them [...] is very planned out and structured so that we can play different parties against each other and make sure we get the last dollar for Celsius account holders because the success of that process will determine recoveries here.”
“It's therefore regrettable that this leak happened.”
“It's particularly unfortunate that this has been monetized by the source of that leak for publicizing her paid-for content page on Patreon,” he said, referring to Fong.
Fong has responded to the accusation, arguing the leaked bids were 100% free with “no paywall.”
“The leaked bids are NOT behind a paywall such a strange accusation,” she said.
The bids were always free - I have posts behind a paywall that involve my personal life / love life which are NOT in the public interest to keep them somewhat private.
— Tiffany Fong (@TiffanyFong_) January 31, 2023
The leaked bids are NOT behind a paywall such a strange accusation @CelsiusUcc
The crypto blogger released details concerning the five bids on Substack last week, which can still be accessed without payment at the time of writing.
Pesce said they are now investigating how the leak occurred, adding there was “significant concern that a potential investor that was involved in the process may be trying to manipulate it for their own benefit.”
“All that being said, we are working very hard to make sure that we can choose a path as quickly as possible and get this bankruptcy over. We're trying to mitigate the effects of that leak," he said.
Related: Leaked bids: Binance, Galaxy Digital among secret bidders for Celsius assets
The UCC attorneys also added some comments in light of the recent examiner's report on Celsius.
The examiner’s report shows in excruciating detail the improper, self-serving actions that Celsius (and its founders) took at customers’ expense, causing immense hardship to thousands of people. The UCC wants any responsible parties to pay for any bad acts.
— Celsius Official Committee of Unsecured Creditors (@CelsiusUcc) January 31, 2023
“I'll be pretty blunt, you know, what Mr. Mashinsky and many members of his team did was wrong. Mr. Mashinsky lied. They covered up a lot of his lies through editing videos,” said Colodny.
“They put themselves ahead of the company, and they put themselves ahead of the account holders more importantly.”
The UCC lawyers said they will continue to explore a number of options for recovery including reinventing itself as a new, publicly-traded “recovery corporation,” selling off some of its mining equipment, as well as looking into “winding down Celsius or transferring crypto to a third party.”
On Monday, Alameda Research Ltd. filed a legal complaint against Voyager Digital LLC and HTC Trading Inc. in the U.S. bankruptcy court. The complaint alleges the defendants received preferential transfers of property from Alameda Research and the plaintiffs are seeking to recover approximately $445.8 million from Voyager and HTC. Legal Battle Erupts Over Crypto Asset […]
Crypto blogger Tiffany Fong has shared documents she claims to have obtained in late December detailing several bids for Celsius' crypto assets.
At least five firms placed bids on Celsius Network’s crypto assets, including Binance, Bank To The Future and Galaxy Digital, according to leaked information shared by crypto blogger Tiffany Fong.
Fong, a follower of Celsius developments who shot to fame after several exclusive interviews with Sam Bankman-Fried following its collapse, has leaked information from documents she says were obtained on Dec. 20 “detailing the bids on Celsius Network’s crypto assets.”
In a Substack post, Fong explained that she initially refrained from leaking the bids to avoid disrupting the bidding process but was prompted to do so after recent commentary from a lawyer representing Celsius.
"I refrained from sharing the bids publicly to avoid disrupting the bidding procedures or negatively impacting customer recoveries; however, in yesterday’s Celsius Network court hearing (1/24/23), Kirkland & Ellis attorney Ross M. Kwasteniet proclaimed the bids 'have not been compelling,” Fong explained.
Among the bidders revealed by Fong include crypto exchange Binance, online investment platform Bank To The Future, digital asset investment manager Galaxy Digital, crypto trading company Cumberland DRW and digital asset investment firm NovaWulf.
According to Fong, the proposals from these crypto firms were submitted in November 2022, with Fong noting that they are "for the most part, abandoned."
The blog stated that Binance proposed a bid of $15 million for the assets, stating that $12 million wouldgo to the Celsius estate and $3 million would be distributed to “migrated users on a pro-rata basis.”
In the purported Summary Term Sheet from Binance, it said that it intends to “acquire and transfer all liquid and certain illiquid crypto” at the fair market value to Binance’s platform.
Galaxy Digital proposed to acquire all illiquid and staked Ethereum (ETH) assets as sough to be “designed stalking horse bidder" — a name given to the initial bidder for the sale of distressed assets — for the amount of approximately $67 million.
Meanwhile, Bank To The Future's bid stated in its transaction structure that all liquid crypto assets and collateral to be returned to creditors pro rata, under the management of Bank To The Future.
In a Jan. 26 tweet, CEO of Bank To The Future Simon Dixon has since confirmed that the contents of the leaked bids relating to his firm were accurate.
I can confirm it is a true reflection of the term sheet @BankToTheFuture sent in to give everybody all coins left with no charge & 100% of illiquid assets. https://t.co/MrYGvoB9eB
— Simon Dixon (@SimonDixonTwitt) January 26, 2023
Fong noted in the blog post that she is “only aware of these five bids” on Celsius’ crypto assets.
She added that Novawulf’s bid was “particularly interesting,” due to having a vague resemblance to “Celsius Network’s newly-proposed restructuring plans.”
In comments to Cointelegraph, Fong said that she has had conversations with “multiple Celsius Network employees” and to her surprise, most employees “were not even made privy to the bids.”
She added “not even those in upper-level management,” were aware of this information.
Related: Celsius amasses 30 potential bidders for its assets, withdrawal motion approved
Fong said that creditors and “even most employees” have been left in the dark about the bids on crypto assets that investors deposited onto the platform.
Fong is not sure how “things will unfold,” but thinks that creditors deserve “more transparency” and have a right to see the bids on assets that “we deposited onto the platform.”
Cointelegraph has reached out for comments from Binance, Galaxy Digital, BnkToTheFuture, NovaWulf and Cumberland DRW.
While the group of 18 customers does not want to prevent the sales from occurring, it argued it needs to be involved to ensure that customers’ interests are represented.
A group of FTX customers has filed a limited objection to FTX’s plan to sell four independently operated subsidiaries, arguing that they should be privy to the sales process to ensure thcustomer interests are represented.
The group has also shared concerns that “misappropriated customer funds” may have been used to acquire or keep these firms running.
The limited objection was filed on Dec. 4 by an ad hoc committee of non-U.S. customers, which comprises 18 members who collectively have claims against FTX in excess of $1.9 billion.
In its filing, the committee argued that previous public statements by FTX, the Securities and Exchange Commission and the Commodity Futures Trading Commission make clear that the customer assets on the platform belong to customers and not FTX.
It said there were “significant concerns over the lack of information regarding sale of the businesses,” and also questioned whether the businesses may be “necessary to a potential restart” of FTX.
A limited objection is similar to an objection except it only applies to a specific part of the proceedings. In this instance, the limited objection is due to the exclusion of the ad hoc committee from the sale process.
Ad Hoc Committee is the first I've seen mention a potential FTX restart to the court - one of the reasons they list for filing they limited objection to FTX's planned sales of solvent subunits. pic.twitter.com/7TCW3WwRm0
— FTX Creditor (@AFTXcreditor) January 5, 2023
The committee has asked the judge to allow them to serve as “consulting professionals” so that they can ensure customers’ interests are represented throughout the bidding process, adding:
“The Ad Hoc Committee does not seek to stand in the way of value-maximizing transactions that the Debtors may pursue, so long as the interests of FTX.com customers are protected.”
Under the proposed bid procedures, only consulting professionals will be able to attend the auction and consult with FTX on matters relating to the sale process, and the committee notes that the consultation parties have no control of the process outside of being able to provide counsel.
Related: US authorities are seizing $460M in Robinhood shares tied to FTX: Report
On Dec. 15, FTX had asked the bankruptcy court to allow them to sell off its European and Japanese branches, in addition to derivatives exchange LedgerX and stock-clearing platform Embed.
LedgerX in particular has been hailed as a success story during the bankruptcy proceedings, with Commodity Futures Trading Commission Chairman Rostin Behnam noting that the firm had essentially been “walled off” from other companies within FTX Group, and “held more cash than all the other FTX debtor entities combined.”
Last week, the same committee asked for customers' names and private information to be redacted from court documents, suggesting that customers could be exposed to identify theft, targeted attack and “other injury.”
