Prominent crypto venture capital firm Polychain has accused its former partner Niraj Pant of conducting undisclosed private transactions with Eclipse Labs, a company under its portfolio. The alleged policy violation attracted widespread attention and revealed the opaque practices common in the crypto industry’s fundraising process.
Polychain’s former partner Niraj Pant had sex in private and took commissions in exchange for investments
Polychain claims Niraj Pant entered into a secret agreement with Eclipse Labs that violated the fund’s policies.
According to an investigation by CoinDesk, former Eclipse Labs CEO Neel Somani promised Pant a stake in Eclipse tokens worth $13.3 million as an inducement to secure financial support from Polychain.
Didn’t talk about taking money privately, didn’t admit it to Polychain
Pant allegedly failed to disclose the deal to Polychain, which later invested in Pant’s AI startup Ritual. Although Pant admitted to receiving "advisor" tokens from Eclipse Labs, he insisted that the deal was completed after Polychain's investment. The situation highlights the secrecy surrounding token trading in the crypto industry.
Polychain statement: I didn’t confess to the company before leaving my job.
Polychain said it was not informed of Pant's financial interest in Eclipse until after he left the company in 2023. The company emphasized that it has robust policies to prevent conflicts of interest. A spokesperson for Polychain revealed that the company launched an investigation after discovering the undisclosed transaction.
Investments from Eclipse Labs and Polychain
Founded by former Coinbase employee Olaf Carlson-Wee, Polychain is one of the largest crypto venture capital firms with more than $11 billion in assets. A key figure in the industry, Pant has been instrumental in steering the company’s investments into promising crypto startups. One of the portfolio companies, Eclipse Labs, is building blockchains that integrate Solana and Ethereum technologies. In March 2024, Eclipse Labs had raised US$50 million before the mainnet was launched.
Controversial Token Distribution
Internal documents and sources show that former Eclipse Labs CEO Neel Somani secretly allocated 5% of the upcoming Eclipse token to Pant in September 2022, at which time Polychain had just led Eclipse’s $6 million pre-seed financing wheel. The stake has since been reduced to 1.33%, but the tokens are still worth $13.3 million based on the most recent fully diluted valuation.
Somani's role and controversial exit
Neel Somani, who resigned as Eclipse CEO due to misconduct, allegedly promised Pant his advisory stake before the pre-seed financing deal was completed to encourage Pant to secure investment and support from Polychain.
Tokens replace equity and become a lawless place
The incident highlights the complex and sometimes confusing nature of crypto venture capital, where tokens are often exchanged in place of traditional equity. The incident highlights the importance of transparency and ethical standards in the rapidly evolving crypto industry.
Polychain’s policies and ethics
Polychain’s policy requires employees to disclose potential conflicts of interest and personal financial transactions. Despite the controversy, Pant remains involved with Ritual, another Polychain investment firm. Ritual, which aims to decentralize the execution of AI models, raised $25 million last November from Polychain and other investors.
The controversy between Polychain and Eclipse Labs reveals the complex dynamics of crypto venture capital, and the importance of maintaining ethical standards. As the industry continues to grow, transparency and compliance with policies will be key to building trust and integrity.
This article, a former partner of the well-known crypto venture capital firm Polychain, was accused of secretly receiving money in exchange for investment, highlighting the chaos of investment institutions in the currency circle. First appeared on Chain News ABMedia.
