CoinDesk first reported the news last night, citing two people familiar with the matter, but Goldman has not confirmed. The story states that Goldman is acting on behalf of investors rather than for its own account. It’s soliciting crypto funds, distressed asset funds and traditional financial institutions.
The distressed assets are likely to be loans granted that are in default. The defaulting companies could have other illiquid assets such as venture investments in web3 or crypto startups.
On June 13, Celsius Network announced that it was pausing all withdrawals. The following day, Wall Street Journal (WSJ) reported the firm had hired restructuring firm Akin Gump Strauss Hauer & Feld, and it later emerged Citi was advising it. Yesterday the WSJ said that restructuring consultants Alvarez & Marsal were involved.
Celsius had assets under management of $11.8 billion and said it had processed loans of $8.2 billion as of mid May. It raised $750 million from Canadian firms WestCap and pension fund Caisse de dépôt et placement du Québec late last year.
Several other cryptocurrency lenders have experienced problems. BlockFi, regarded as the blue-chip lender, received a $250 million loan from crypto exchange FTX last week. And yesterday, the Wall Street Journal reported discussions between BlockFi and FTX about the exchange taking an equity stake in the firm.
Hedge fund Three Arrows Capital (3AC) is the other big distressed crypto firm. On Wednesday, Canadian listed Voyager Digital, also a crypto lender, announced that 3AC had not repaid around $600 million in loans. Alameda Research, which already owns 11.56% of the company, is providing a revolving loan equivalent to more than $500 million. FTX and Alameda Research are both controlled by Sam Bankman-Fried.