Galaxy Digital Gets Celsius Assets at 60% Discount After Crypto Lender’s Bankruptcy

Emily Nicolle, Bloomberg News

Mike Novogratz, founder and chief executive officer of Galaxy Digital LP, speaks during the TOKEN2049 in Singapore, on Wednesday, on Sept. 28, 2022. The cryptocurrency event runs through Sept. 29. , Bloomberg

(Bloomberg) -- Galaxy Digital is paying $44.1 million to buy Celsius Network’s GK8 business — more than 60% lower than what the bankrupt crypto lender paid to acquire the self-custody platform just last year.

The deal for GK8 was agreed at a purchase price of $44 million in cash plus $100,000 in assumed liabilities, according to a court filing. Celsius had previously acquired GK8 for $115 million in November 2021.

The acquisition, which was announced on Dec. 2 and is subject to court approvals, would add a team of nearly 40 staffers to Galaxy’s workforce.

Ryan Kielty, a partner at restructuring group Centerview Partners which was hired to oversee the auction of the assets, said in the filing that selling GK8 was a reasonable move by the debtors, given “the steep decline” in crypto prices after Celsius initially bought the platform, among other things.

GK8’s marked-down price tag is reflective of soured crypto prices more broadly, which have taken a tumble since the business’s last valuation. Bitcoin reached its all-time peak at almost $69,000 last November, yet the token presently trades around 75% lower at about $16,800.

Six firms had submitted initial bids at the start of the auction process, Kielty said, but only Galaxy submitted a final bid and deposit by the agreed deadline. Its terms included the requirement that GK8 co-founders Lior Lamesh and Shahar Shamai stay with the company.

--With assistance from Rick Green.