Goldman Sachs is reportedly seeking $2 billion in commitments from investors to buy distressed crypto assets of Celsius at steep discounts if the crypto lender goes bankrupt.
As the sources said, the proposed deal would allow investors to buy up Celsius’ assets at potentially big discounts in the event of a bankruptcy filing.
According to a person familiar with the situation, Goldman Sachs appears to be gauging interest and soliciting commitments from Web3 crypto funds, funds specializing in distressed assets, and traditional financial institutions with ample cash on hand. The assets, most likely cryptocurrencies having to be sold on the cheap, would then likely be managed by participants in the fundraising push.
Celsius, having more than $8 billion lent out to clients and $12 billion in assets under management, suddenly stop withdrawals from its platform on June 12, citing “extreme market conditions.” The disclosure exacerbated those conditions, shortly sending the price of Bitcoin under $20,000.
Last week, the firm has brought in consultants from the management advisory firm Alvarez & Marsal in order to prepare the firm for the worst possible times. Furthermore, the firm has hired restructuring consultants to provide advice on potential bankruptcy filing as well.
The WSJ had previously reported on June 14 that the firm had hired restructuring attorneys from another legal firm called Akin Gump Strauss Hauer & Feld LLP. As per the report, the consultants would advise Celsius on “possible solutions for its mounting financial problems.” It remains unclear if the DeFi lending protocol will file for bankruptcy and if the customers of the platform will be able to get a refund for their investments.
Celsius raised $750 million from investors in 2021, including Canada’s second-largest pension fund, Caisse de dépôt et placement du Québec (CDPQ), valuing the business at $3.25 billion.