VC company Fabric Ventures has committed to investing $8 million, but bankrupt cryptocurrency lender Celsius is demanding to withdraw more than $6 million of that amount.
Celsius claims to have cleared their debt
Celsius claimed to have cleared its extended Series B in November 2021 by increasing a $400 million investment round to about $750 million at a $3.25 billion valuation.
A plan established in April last year saw Fabric’s first $2 million investment made in May. It was planned to make substantial installments of $2 million in June and $4 million in July.
The idea, however, did not work out as expected.
In July, about a month after preventing client withdrawals and locking billions of dollars spanning more than a million accounts, the troubled lender declared bankruptcy. Recent court records revealed that Celsius has a $2.8 billion financial statement deficit due to its liabilities exceeding its assets by more than $6.7 billion.
According to the recently filed court document, the lawsuit purported to claim compensation for the two outstanding payments, $6,003,379, including interest, fees, and any additional reliefs outlined in the filing.
Fabric Ventures’ initial investment
Fabric Ventures, a venture capital company, invests in scalable decentralized networks. Since 2012, Fabric has invested in creators, companies, and digital assets at every stage of development.
As word of the financial difficulties at Celsius emerged, correspondence in the court filing reveals that Fabric also tried to get back its initial $2 million advance pending project completion.
Celsius remained silent despite being contacted for a statement. Fabric Ventures also opted not to issue any remarks regarding the matter.
The action is the most recent in a protracted bankruptcy proceeding overseen by American legal firm Kirkland & Ellis for Celsius. Documents from last week indicated that the lender had started the process of selling its bitcoin mining hardware for $1.3 million.
According to a sale notice presented on Jan. 11 to the U.S. Bankruptcy Court for the Southern District of New York, it sells almost 2,700 “new-in-box” MicroBT M30S units.