Here’s how Celsius’ bankruptcy filing will benefit Goldman Sachs
Investment bank Goldman Sachs is raising $2 billion to buy the assets of troubled crypto lender Celsius as it prepares for possible bankruptcy, according to Fortune. Goldman Sachs investors will be able to acquire Celsius’s assets at significant discounts, even if Celsius does not declare bankruptcy. Meanwhile, Celsius has hired additional restructuring lawyers from consultancy Alvarez & Marsal.
Goldman Sachs wants to buy Celsius assets at a discount
According to people familiar with the matter, Goldman Sachs is seeing interest and commitments from Web3 crypto funds, funds specializing in investing in distressed assets and traditional financial institutions, reported Fortune on June 25.
Additionally, Goldman Sachs has expanded its footprint in the crypto market. For example, Goldman Sachs is in talks with crypto exchange FTX to integrate leveraged derivatives trading. Currently, FTX is pledging to bail out several crypto firms, such as BlockFi and Voyager Digital, as they face liquidation risks.
Meanwhile, crypto lender Celsius has hired consulting firm Alvarez & Marsal for a potential bankruptcy filing, reported the Wall Street Journal on June 25. Indeed, Citigroup and Akin Gump Strauss Hauer & Feld hired by Celsius last week recommended filing for bankruptcy.
Celsius plans to continue working with regulators and officials after suspending withdrawals, trades and transfers between accounts. Unfortunately, Celsius’s plans to resolve liquidity issues appear to be failing, with bankruptcy remaining the only option.
Celsius liquidated its stETH holdings and removed its ETH positions from Bancor’s liquidity pool. The community recovery plan also failed. On Friday, short sellers of Celsius’ CEL token hedged their positions by forcefully increasing the price through mass buying and pulling it out of various exchanges.
Celsius is also facing lawsuits from investors
Celsius is surrounded by numerous problems, including legal action from its investors after the company suspended withdrawals. In fact, Ben Armstrong, founder of BitBoyCrypto.com, had warned that a class action lawsuit was being drawn up against Celsius. Thus, bankruptcy may remain the only option for Celsius.
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