Crypto lending company Celsius Network appears to be on its last legs and Wall Street giant Goldman Sachs is reportedly set to swoop in and acquire it.
According to sources, Goldman Sachs is gearing up to raise $2 billion from investors in order to acquire assets from Celsius amid serious financial woes.
The sources claim the deal would let investors load up on Celsius’ assets at steep discounts in case the struggling company files for bankruptcy. Celsius had amassed over $11 billion in assets under management and also loaned clients a total of $8 billion before freezing withdrawals earlier this month.
As the crypto market crashed, Celsius encountered serious liquidity issues. Per reports, Goldman Sachs is seeking commitment from Web3 cryptocurrency funds as well as legacy financial companies with abundant cash. The banking giant is also in talks with funds that specialize in distressed assets.
What Does This Mean For Celsius Clients?
Celsius’ assets are mainly cryptocurrencies which will be sold at cheap prices and later managed by the participating investors.
The co-founder and former CEO of BitMEX, Arthur Hayes, observed that Goldman Sachs is not actually putting its own funds into this proposed arrangement.
“Please don’t believe Goldman Sachs is putting their own money at risk unless they explicitly say so. GS is doing what advisory banks do, assemble a bunch of investors, and help them structure the purchase of distressed assets for a phat fee,” he said in a Saturday tweet thread.
In his opinion, the community should only rejoice once the banking giant has successfully purchased Celsius’ assets and restored withdrawals. Creditors recovering some of their money would certainly restore confidence and provide rocket fuel for a full-fledged crypto bull run.
Otherwise, users should treat all “bailouts” as “PR stunts, until actual money is deployed, and actual depositors can withdraw some or all of their funds from insolvent CENTRALISED crypto lenders”.
Suffice it to say, Celsius is drifting dangerously close to bankruptcy. As ZyCrypto previously reported, the crypto lender hired restructuring attorneys from the law firm Akin Gump Strauss Hauer & Feld LLP. The Wall Street Journal reported Friday that Celsius had brought in more consultants from the advisory firm Alvarez & Marsal to help it prepare for a potential bankruptcy filing.
Celsius has offered few details since suspending withdrawals. In a June 19 announcement, the firm said that “our objective continues to be stabilizing our liquidity and operations. This process will take time.”
At the time, the company had indicated that it would cease holding Q&A sessions with community members.