‘Categorically false’ — Attorney denies bids for Celsius assets were rejected

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.

https://t.co/hbJ5GJchZC

— 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.

The leaked bids are NOT behind a paywall such a strange accusation @CelsiusUcc

— Tiffany Fong (@TiffanyFong_) January 31, 2023

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.”