Goldman Sachs wants to snap up Celsius assets at big discount
Goldman Sachs is reportedly looking to secure $2 billion in funding to buy up distressed assets from Celsius in the event that the troubled crypto lender goes bankrupt.
The proposed deal could see participation from Web3 crypto funds, funds specializing in distressed assets, and traditional financial institutions. The investment bank aims to allow investors with ample cash on hand to snap up Celsius assets at potentially big discounts. However, it’s still approaching them to gauge interest in the potential purchase.
Goldman Sachs would only act as a broker and doesn’t intend to invest or manage Celsius’ acquired assets. Instead, investors involved in the fundraising process will be responsible for managing roughly $8 billion loaned out to Celsius clients and $12 billion in assets under management.
Earlier this month, Celsius abruptly announced that it was pausing all withdrawals, swaps and transfers between users’ accounts because of extreme market volatility. The crypto lending and borrowing platform is apparently first looking for possible financing options from investors but is also exploring other strategic alternatives.
Celsius has hired restructuring attorneys to advise on possible solutions for its mounting financial problems. Citigroup has also been enlisted by the firm to advise on possible solution
Celsius had also received an unsolicited acquisition offer from rival Nexo Financial. The latter said that Celsius’s apparent insolvency has prompted it to offer to acquire its assets in order to supply immediate liquidity to affected clients. It added that before that and, as a sign of goodwill, they reached out to the Celsius team to provide support and assistance, but their help was denied.
Some blamed a sharp slump in bitcoin prices for recent troubles. Celsius, which at one point claimed more than $20 billion in assets, has apparently suffered an old-fashioned bank run which occurs when many clients withdraw their money because they believe their custodian may cease to function in the near future.
As per recent reports, the bear market has caused some damage to several players across the cryptocurrency world. Binance, the world’s largest cryptocurrency exchange, froze withdrawals for over three hours just as the price of bitcoin and other cryptocurrencies plunged.
Goldman Sachs was in the crypto news earlier this month when it offered its first ever derivatives product linked to ether (ETH), in a significant step for a major bank that accelerates Wall Street’s embrace of cryptocurrencies. The move comes nearly 16 months after the investment bank traded its first over-the-counter Bitcoin options.
