In a Friday press release, Galaxy Digital announced it has won the bid to buy crypto custodian GK8 from insolvent crypto lender Celsius Network which filed for Chapter 11 bankruptcy protection in July. Although terms of the deal weren’t disclosed, Galaxy’s representative told Decrypt that "the purchase price we agreed on was materially less than what GK8 was previously purchased for."
GK8 was initially bought by Celsius in November 2021 for $115 million and now has been put up for sale along with other Celsius assets as part of its bankruptcy proceedings. The acquisition is expected to help Galaxy Digital expand its institutional offering GalaxyOne, which provides secure cold storage for customers.
Galaxy also announced its plans to expand the GK8 team by around 40 people, including cryptographers and blockchain engineers. Co-founders Lior Lamesh and Shahar Shamai will stay with the company to lead Galaxy's new custodial venture. However, the deal still needs to secure regulatory approval.
"The acquisition of GK8 is a crucial cornerstone in our effort to create a truly full-service financial platform for digital assets, ensuring our clients will have the option to store their digital assets at or separate from Galaxy without compromising versatility and functionality," said Mike Novogratz, founder and CEO of Galaxy, said in a statement. "Adding GK8 to our prime offering at this pivotal moment for our industry also highlights our continued willingness to take advantage of strategic opportunities to grow Galaxy in a sustainable manner."
For context, Celsius filed for Chapter 11 bankruptcy protection in July after freezing customer withdrawals in June. The crypto lender estimated it has more than 100,000 creditors, with assets and liabilities between $1 billion to $10 billion.