Figure partners with NovaWulf on proposed reorg of crypto lender Celsius

Fintech Figure Technologies will partner with NovaWulf Digital Management to provide blockchain technology solutions for a proposed reorganization of troubled crypto lender Celsius.

The partnership was made public by Figure on Thursday and comes a day after an announcement from Celsius — which filed for bankruptcy in July 2022 — that it will be acquired by NovaWulf. 

The reorganization plan will distribute “liquid crypto to all account holders” and create a “litigation trust” while also providing creditors with common equity in a new company called NewCo — which would be owned by certain Celsius’ creditors and managed by NovaWulf.

NewCo is expected to be a public reporting company that is initially 100% owned by Celsius creditors with its common equity provided in a tokenized form. That will trade on an alternative trading system administered by SEC-registered broker dealer Figure Securities, built on Provenance Blockchain — Figure’s proprietary platform.

“Our companies are very complementary, and we are both looking to do something transformational,” Mike Cagney, CEP and co-founder of Figure, said in a statement. 

Figure Technologies, founded in 2018 by Cagney, uses Provenance Blockchain for loan origination, equity management, private fund services, banking and payments, according to its website.

With more than 500 employees across the country, the company claims to have posted 89% team growth over the past year and helped more than 60,000 households in America.

Figure’s partnership with NovaWulf comes after its plan to buy a privately held $3-5 billion asset holding company with nationwide residential mortgage lending and servicing operations via SPAC got scrapped.

Figure Acquisition Corp., a blank check company affiliated with Figure, was delisted from the New York Stock Exchange in December.

Cagney’s attempt to bring blockchain technology to mortgage lending at scale dates back to August 2021. Figure announced its intention to merge with Homebridge Financial Services, but regulatory delays led to a cancellation in June 2022.