Bankrupt crypto lender Celsius Network LLC said on Thursday it has chosen Fahrenheit's proposal as the winning bid to manage a new entity to be owned by its creditors, directing itself out of bankruptcy.

Fahrenheit, a consortium that includes blockchain-based venture capital firm Arrington Capital, will provide the capital, management team and technology to establish and operate the new company (NewCo), Celsius said.

"Under the Plan, Celsius' account holders will own 100% of the new equity in NewCo," it said, adding that NewCo will be overseen by a new board of directors, a majority of which will be appointed by creditors.

New Jersey-based Celsius also confirmed that it has secured a backup bid with the Blockchain Recovery Investment Consortium (BRIC), a holding company affiliated with the Winklevoss-owned Gemini Trust.

Celsius filed for Chapter 11 protection in July, one of several crypto lenders to go bankrupt following the rapid growth of the industry during the COVID pandemic.

The company kicked off an auction on April 22, seeking to find a buyer who could guide its crypto lending and bitcoin mining businesses out of bankruptcy.

It initially planned to accept NovaWulf's bid, but took more time to develop additional bids from Fahrenheit and BRIC, a holding company affiliated with the Winklevoss-owned Gemini Trust.

(Reporting by Shivani Tanna in Bengaluru)