Polychain Capital, a leading venture firm in the crypto space, has accused its former general partner, Niraj Pant, of secretly securing a token deal with Eclipse Labs, a startup in which Polychain had invested, as per a recent CoinDesk report. 

The firm claims Pant violated company policies by arranging a deal that initially promised him a 5% token stake. This stake was later reduced to 1.33%, worth $13.3 million at the token's most recent valuation.

Polychain was unaware of this arrangement until after Pant's departure from the firm.

"We were unaware of the financial relationship between Eclipse and Niraj Pant until after his departure from the firm," a Polychain spokesperson said. "Polychain has robust policies and procedures surrounding employees serving in advisory roles. Following Mr. Pant’s departure, we investigated the matter and discovered the violation of our policies."

According to Polychain, Pant orchestrated this deal shortly after leading a $6 million pre-seed funding round for Eclipse Labs in September 2022. The deal was allegedly made with Neel Somani, the former CEO of Eclipse Labs. 

Pant's Defense

Pant maintains that his advisory agreement with Eclipse was above board. He shared legal documents with CoinDesk showing he is set to receive a 1.33% stake in Eclipse’s token, revised from an initial undisclosed amount. This revised stake, dated April 29, 2024, is higher than that of almost all other Eclipse advisers and investors.

However, according to CoinDesk, Polychain may have required him to disclose his advisership with Eclipse if the relationship began while he was still at the company. Employees must pre-clear certain transactions and disclose holdings and transactions to monitor conflicts of interest, according to Polychain's official policy filing with the SEC

The situation is particularly notable because Pant was a general partner at Polychain from 2017 to 2023, responsible for directing the firm's venture investments into promising crypto startups. 

His undisclosed deal with Eclipse, which granted him a significant token allocation comparable to Polychain’s own, was not disclosed to most of Eclipse's executives, advisers, or large investors.

Polychain's recent accusations against Pant occur when the firm is actively investing in other crypto ventures. For instance, the Bitcoin restaking platform Lombard raised $16 million in seed funding led by Polychain Capital. Further, Movement Labs, a blockchain development team, secured $38 million in Series A financing with Polychain's backing..