$8 million commitment recall by Celsius brings wrangle with Fabric Ventures

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Insolvent Celsius aims to demand more than $6 million of unfulfilled investment payments pledged by Fabric Ventures, a VC firm.

According to a court document filed on Tuesday, Fabric Ventures was set to finance Celsius’s Series B round by more than $ 8 million, rolled out in three payments.  In November 2021, Celsius said it had terminated its prolonged Series B, magnifying a $400 million round to $750 million at a $3.25 billion valuation. 

Fabric’s first settlement of $2 million was made in May. Just according to a schedule agreed upon in April 2022. The subsequent payments were supposed to be $2 million in June and $4 million in July. 

The order of payment did not follow the master plan. The troubled lender filed for bankruptcy in July, approximately a month after stopping client withdrawals and shutting in billions of dollars across more than a million accounts. 

Current court documents show that Celsius’s liabilities were more than $6.7 billion, and its assets were worth only around $3.9 billion, resulting in a balance sheet deficit of $2.8 billion.

The newly filed court document declares an action that seeks damages of $6,003,379, plus interest, fees and other relief charges.

No Confirmation from Celcius or Fabric Ventures

As news of distress at Celsius went viral, Fabric Ventures attempted to reclaim its initial $2 million advance pending completion of the investment. Correspondence in the court document records this. Neither Fabric nor Celsius responded to a request for comment. 

U.S. law firm Kirkland & Ellis, representing Celsius, orchestrated this latest move within a prolonged bankruptcy process. A US bankruptcy judge ruled on June 4 that up to $4.2 billion in customer funds are the property of Celsius. This judgment bolsters Celsius to pay bills amid its bad crypto price plunge by approximately 79%.

It is keenly noted that Celsius executives withdrew millions of dollars in assets just before Celsius froze customer withdrawals. Mashinsky, former founder and CEO, and Leon, who jointly withdrew approximately 22 million in assets, have resigned since July 2022. In this report, the lender has set about selling its bitcoin mining equipment for $1.3 million. It is selling close to 2,700 “new-in-box” MicroBT M30S units, records a Jan. 11 notice of sale filed with the U.S. Bankruptcy Court for the Southern District of New York.

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