Galaxy Digital wins bid to acquire self-custody platform GK8 from bankrupt Celsius Network

Mike Novogratz's investment management company Galaxy Digital stepped up to bid for bankrupt crypto lending firm Celsius Network's assets. The financial services company intends to flip the self-custody platform GK8 into an additional service for its institutional investors.

Galaxy Digital to acquire GK8

Galaxy Digital Holdings announced on Friday that the company had been selected as the winning bidder for Celsius' GK8. Since Celsius Network filed for Chapter 11 bankruptcy earlier this year, the process of sale is subject to court approvals. 

Galaxy Digital stated that the company would use the self-custody platform for its offerings to institutional investors. GK8 will be added to the firm's under-development prime offering for institutional clients, GalaxyOne, adding another service along with trading, lending, cross-portfolio margining, and derivatives.

Mike Novogratz, the Chief Executive Officer (CEO) of Galaxy Digital, stated during the press release,

"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."

Celsius' bankruptcy emerged as one of the surprises to the crypto industry. The crypto market contagion of the second quarter, which also wiped out Voyager, brought Celsius to its knees, resulting in the lending platform putting up some of its assets for auction.

The crypto market is currently facing another contagion due to the collapse of FTX. The exchange's downfall further complicated things for Celsius, who had over $13 million worth of under-collateralized loans to Alameda Research.

Mike Novogratz against Sam Bankman-Fried

The head of Galaxy Digital has been very critical of the former CEO of FTX, Sam Bankman Fried. In response to Bankman-Fried's failure of oversight and confession of "unknowingly commingling funds", Novogratz said,

"He needs to be prosecuted. He will spend time in jail. They perpetuated a large fraud. And it wasn't just Sam. You don't pull this off with one person."

Calling Sam Bankman-Fried delusional during an interview with CNBC, Mike Novogratz said,

"I'm not saying he even planned this all like a criminal mastermind. What they did was criminal and they need to be prosecuted for it."

He went on to add that prosecution of FTX's former head is important not only for the sanctity of the crypto market but for all markets as it reinstates investors lost trust.