The leading investors in Celsius Network won’t be backing the crypto lending company with additional funding. According to a Wall Street Journal report, people familiar with the matter say that the embattled crypto lending platform Celsius Network has not reached the brink.
Caisse de depot et placement du Quebec is a Canadian major pension fund. The New York-based WestCap Group was the lead in Celsius’ $750 million Series A funding round. This raised Celsius’ valuation to $3.5 Billion.
But, they are not willing to give additional funds to Celsius. Celsius had earlier this week stopped withdrawals from its platform.
“Few are feeling OK,” a person who knew about the negotiations between Celsius investors and Celsius told the .
The person who commented on earlier investments in Celsius said that there was “more risk than fully appreciated”
Celsius announced a $400,000,000 Series B funding round last October amid severe scrutiny of crypto lending firms by local regulators. Another $350 million was injected into the firm in November.
Investors didn’t seem to be concerned at the attention crypto lending firms received from regulators at the time.
“It is quite common for regulators to start examining market leaders in order clarify their own rules. Laurence Tosi, WestCap’s founder, stated that this is part of the regulatory process for a new market.
The options available to investors
According to another person familiar with the talks, investors are now willing to stand by or allow another company to try to buy Celsius. One option is to let the business restructure. Celsius reportedly hired restructuring lawyers from Akin Gump Strauss Hauer & Feld LLP earlier in the week.
Celsius posted a blog on Sunday saying that it was suspending all withdrawals and swaps between accounts. This was citing “extreme markets conditions”.
Rival company Nexo was quick reacting to the news, submitting a bid for Celsius’ “certain remaining qualifying asset(s)”.
Until now, neither Celsius nor Nexo have made any additional comments. However, Alex Mashinsky (CEO of Celsius) took to Twitter on Wednesday , to declare that his team was working “non-stop” on the matter and to request patience from customers.
Reuters also reported the same day that five states’ securities regulators opened investigations into Celsius’s decision to stop withdrawals.