-
Galaxy Digital is preparing to complete its acquisition of crypto self-custody platform GK8.
-
Mike Novogratz’s firm prevailed in the auction for GK8 earlier this month.
-
The sale of GK8 is part of the broader bankruptcy proceedings involving Celsius Network.
Galaxy Digital to finalize its acquisition of GK8
On Tuesday, December 13, U.S. Bankruptcy Judge Martin Glenn approved the sale of the crypto self-custody platform GK8 to Galaxy Digital. This decision is a component of the ongoing Chapter 11 proceedings for crypto lender Celsius Network.
Galaxy Digital, led by Mike Novogratz, is a financial services firm focused on digital assets. The company won the auction for GK8 earlier in December, positioning it to add secure custody technology to its product suite.
Specific deal terms have not been publicly disclosed. A Galaxy spokesperson, Michael Wursthorn, noted that the purchase price is significantly lower than the amount Celsius originally paid for GK8 a year ago.
Celsius acquired GK8 in November 2021 for $115 million during the peak of the cryptocurrency bull market. Since then, Celsius has faced financial difficulties that culminated in a Chapter 11 bankruptcy filing in July 2022 and leadership changes later that year.
Founder and former CEO Alex Mashinsky resigned in September following the company’s bankruptcy filing and subsequent operational challenges. The GK8 sale is one of several asset dispositions Celsius has pursued while navigating its restructuring process.
Galaxy aims to expand prime brokerage services
Galaxy Digital says the acquisition of GK8 will strengthen its prime brokerage offering by integrating advanced self-custody technology and security expertise. About 40 GK8 employees, including blockchain engineers and cryptographers, are expected to join Galaxy’s team as part of the transition.
Although the bankruptcy court approved the transaction, it remains subject to regulatory clearance. Galaxy has indicated the deal would broaden its international footprint, adding a presence in Tel Aviv, Israel.
Celsius has marketed several assets since entering bankruptcy to raise funds for creditor claims. Recently, Judge Glenn ordered Celsius to return roughly $44 million in cryptocurrencies to customers who participated in its custodial program, emphasizing the court’s priority of enabling creditor recoveries as promptly as possible.
Celsius continues to owe billions of dollars to creditors. The sale of assets like GK8 will contribute to the pool of resources available during the restructuring and may help partially address outstanding liabilities as the bankruptcy process progresses.