Celsius Network investors are unlikely to provide more funding to bail out the struggling cryptocurrency lender, people with knowledge of the situation said.
A large Canadian pension fund, the Caisse de depot et placement du Quebec, and WestCap, a growth capital firm founded by tech investor Laurence Tosi, a former Airbnb CFO, are not expected to invest more money. to help the crypto lender, these people said. Last year, WestCap and Caisse de depot led a Series B funding round that raised $750 million for Celsius and valued the crypto startup at over $3 billion.
“Not many people are feeling good,” said a person familiar with the talks between Celsius and its investors. “There were more risks than fully appreciated,” the person said, referring to the investment in Celsius.
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Celsius, which operates a cryptocurrency lending platform, spooked crypto investors on June 12 when he suspended all withdrawals, exchanges and transfers from his clients to stop a run on his accounts. The company takes cryptocurrency deposits from customers and lends them to other users to earn a return. But cryptocurrency values have crashed and the lender is struggling to meet its obligations to depositors and other creditors.
Celsius has hired restructuring lawyers from the law firm Akin Gump Strauss Hauer & Feld to help resolve its growing financial problems and to review options, including new investment or financial restructuring, The Wall Street Journal reported earlier this week.
Existing investors seem willing to step back and let another company try to buy the exchange, or simply let the company restructure, according to another person familiar with efforts to save the company from Celsius.
This article was published by The Wall Street Journal, part of the Dow Jones