Key Points:
- Celsius is attempting to withdraw more than $6 million from a Fabric Ventures investment commitment.
- During a Series B round that took place in 2021, Fabric Ventures promised to invest $8 million in Celsius. On December 3, 2021, they signed a Series B deal with Celsius’s current shareholders and top investors.
- The plan did not work out as expected. In July, about a month after preventing client withdrawals and locking billions of dollars across more than a million accounts, the troubled lender filed for bankruptcy.
Fabric Ventures, a venture capital firm, has pledged to spend $8 million, but bankrupt cryptocurrency lender Celsius is requesting to withdraw more than $6 million of that sum.
Venture capitalists are growing less eager to make new bets. Some of them apparently violate previous agreements reached with different organizations.
According to a court filing submitted on Tuesday, Fabric had agreed to make three payments totaling more than $8 million in the Series B round of Celsius. By increasing a $400 million round to $750 million at a $3.25 billion valuation, Celsius claimed to have finished its extended Series B in November 2021.
A plan established in April of last year saw Fabric’s first $2 million payment made in May. It was planned to make the following installments of $2 million in June and $4 million in July.
The plan did not work out as expected. In July, about a month after preventing client withdrawals and locking billions of dollars across more than a million accounts, the troubled lender filed for bankruptcy. Recent court records revealed that Celsius has a $2.8 billion balance sheet hole as a result of its liabilities exceeding its assets by more than $6.7 billion.
Fabric Ventures is being sued by the now-bankrupt cryptocurrency lender Celsius for breaking its promise to invest $8 million.
According to a newly filed court document, the case sought $6,003,379 in damages for the two unpaid payments, including interest, court costs, and any other remedies mentioned in the filing.
“Fabric agreed to pay $8,003,379 in three installments: $2,000,000 in May 2022, $2,000,000 in June 2022, and $4,003,379 in July 2022,” the document states.
However, it made the first installment on time but declined to pay the following two.
Scalable decentralized networks are the focus of venture capital firm Fabric Ventures’ investments. Fabric has made investments in creators, businesses, and digital assets at every step of growth since 2012.
Prior to its current financial issues, Celsius suffered a number of operational difficulties. The former CEO of Celsius, Alex Mashinsky, might potentially be charged with misleading investors.
The court document’s correspondence suggests that Fabric attempted to recover its initial $2 million advance payment pending project completion as news of Celsius’ financial troubles spread.
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Harold
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