Celsius Network seeks court approval to sell Osprey Bitcoin shares

By Sarah Lizee

Olympia, Wash., June 8 – Celsius Network LLC is seeking approval to sell Osprey Bitcoin shares to Anax Trading, LLC for $16 million, according to a motion filed Wednesday with the U.S. Bankruptcy Court for the Southern District of New York.

As part of their prepetition investment strategy, the debtors purchased 2,932,321 shares issued by the Osprey Bitcoin Trust.

The trust holds Bitcoin, and each Osprey Bitcoin share represents a share of the ownership of the Bitcoin in the trust’s possession.

The shares can be purchased by investors in-kind with Bitcoin or with fiat currency.

The debtors purchased the Osprey Bitcoin shares with Bitcoin at a time when the price per Bitcoin was significantly higher than it is today.

Although the shares are transferable and tradable over the counter, the secondary market for the shares is relatively illiquid, Celsius said.

Moreover, the debtors hold a significant position in the Osprey trust, which makes selling the shares on the secondary market more challenging, especially in light of the ongoing pressures on the cryptocurrency market and the value of Bitcoin, Celsius said.

Celsius said that although the purchase price that has been proposed is discounted from the current price of Bitcoin, the sale provides the debtors a means to monetize an otherwise illiquid asset at a fair price.

The company said it discussed the matter with the official committee of unsecured creditors, which agrees that the proposed transaction is in the best interest of the debtors’ estates and creditors.

The Hoboken, N.J.-based cryptocurrency lending platform filed bankruptcy on July 13, 2022 under Chapter 11 case number 22-10964.

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