Phat Loop Studios, the company under fire last week for abandoning its Kickstarter and crypto-funded MMORPG game Untamed Isles, is now denying accusations that they lost their backers’ funds investing in crypto.

The company came under fire last week after announcing a “hiatus” of their Pokemon-like open-world video game, with some of the community accusing the developers of spending game development funds to bet on the crypto markets.

In a statement on Wednesday, the developers behind the project, which raised over $525,000 United States dollars, or $841,000 New Zealand dollars, on Kickstarter, insisted that all funds raised “were spent by the studio developing the game.”

The company stated that the reason for the hiatus is due to “the company exhausting its available funds” after “several investors” pulled out recently “due to concerns about both the economic market along with the crypto market.”

According to the initial announcement about the hiatus, the project had been gearing toward an October release. owever, Grant stated that the development of the project had been put on pause as the company was unable to “financially keep up with the demands.”

Grant stated that the main reason for this was due to the “economic landscape” changing for cryptocurrency, making it hard to continue pursuing the project that employed “more than 70 staff” to work “relentlessly for more than two years” to build the project.

“The crypto market crash meant that investors that were lined up earlier this year pulled out” who was necessary to “make it through to our runway to launch,” said Grant. 

The game was initially designed to launch with nonfungible token (NFT) implementation, but the plans for this were later dropped outside of an optional external marketplace.

This angered many who questioned the legitimacy of using the crypto market crashing as an excuse for the project failing if it was based on “game first, crypto second.” 

It is unclear how much the project actually planned to integrate cryptocurrency into the project at all, however, Grant stated that “until the crypto situation is resolved — and we’re confident it will be at some stage ” then we have to hibernate development on this project.”