Private-Equity Giant Apollo Is Part of a Bid to Buy Bankrupt Crypto Firm Celsius

Apollo Global Management, the distressed-investing specialist that oversees more than half a trillion dollars of assets, is participating in a bid to acquire stricken cryptocurrency lender Celsius, according to a person familiar with the matter.

Celsius has publicly identified several entities who are trying to purchase the company. The person said Apollo is an investor in the bid submitted by NovaWulf.

Apollo, which is one of the largest private-equity firms in the world, declined to comment, as did NovaWulf.

The crypto industry was pummeled last year by falling prices and scandals that triggered a slew of high-profile bankruptcies. Potential buyers for those assets did emerge – though not all efforts were successful – but giants from traditional finance generally stayed away. So, Apollo’s participation in Celsius is a rare case.

The revamped Celsius will mine bitcoin (BTC), participate in ether (ETH) staking and issue blockchain-based security tokens representing ownership interests in itself. A winner of the Celsius auction has not yet been announced; the sale process was recently paused with no new date revealed.

Investors in the NovaWulf bid – if it’s picked as the winner – will receive a tiered management fee plus an incentive fee tied to the restructured Celsius’ net asset value (NAV), according to an investor deck seen by CoinDesk. Apollo’s name and the terms of its deal with NovaWulf were not mentioned in the document.

NovaWulf has partnered with the Provenance Blockchain to facilitate the issuance and trading of equity tokens in the new Celsius. Provenance’s sister fintech company, Figure, will help provide infrastructure for the tokenized securities. Apollo is already working with Figure on tokenized assets.

Provenance, which uses the Cosmos blockchain as its underlying ledger, boasts over $7 billion in total locked value (TVL), the largest trove of on-chain assets outside of Ethereum, according to Provenance Blockchain CEO Morgan McKenney. Meanwhile, Figure qualifies as a broker-dealer and has an alternative trading system (ATS) exemption to trade natively issued blockchain securities, she added.

On the subject of Apollo and the opportunity with Celsius, McKenney said the private equity firm is a “flagship,” that is “leading the industry into the future.”

“Apollo is huge in credit; they know everything about credit,” McKenney said in an interview with CoinDesk.

UPDATE (May 8, 2023, 22:38 UTC): Adds that Apollo declined to comment.