Bankrupt lending platform Celsius left investors alone after freezing withdrawals during the crash. Now, a Canadian pension fund admits to losing hundreds of millions as a result of its investments in the altcoin project.
Canada Pension Fund loses $150 million from collapsing altcoin project
Caisse de Depot et Placement du Quebec (CDPQ) invested $150 million in Celsius in October 2021 as part of a $400 million funding round jointly led by WestCap Investment Partners LLC, Bloomberg reports. CPDQ spokesperson Maxime Chagnon, an institutional investor in pension plans and insurance programs, said via email:
We recognize that our investment in Celsius raises a number of questions… This is something we take very seriously and we will comment further at the appropriate time. Celsius is currently engaged in a complex process that will take time to resolve.
According to reports, CPDQ’s October contribution increased Celsius’s value by over $3 billion. Company spokesperson Maxime Chagnon states that his company “makes every effort to protect our rights,” without providing further details on this effort.
CPDQ says Celsius investments are not performing as expected
A spokesperson for CPDQ shared that they are dedicating some of their fund portfolio to assets with really high potential for returns. However, he explained that some of these investments, such as in Celsius, did not yield the results CPDQ had expected:
A very small portion of our overall portfolio invests in innovative, high-growth, and new technologies in riskier industries that offer outstanding return potential and deliver outstanding returns to our clients over several years… However, some of our investments, such as in Celsius, are not performing as expected.
During the investment, CPDQ’s Chief Technology Officer Alexandre Synnett referred to Celsius as “the world’s leading crypto lender with a strong management team that puts transparency and customer protection at the center of its operations.”
Ponzi-like scam accusations against altcoin project
Meanwhile, a class action lawsuit was filed against Celsius for selling unregistered securities in a ponzi-like scheme. The class action document was made available on Twitter by the former SEC enforcement attorney on July 15. In early July, Celsius’ former investment manager Jason Stone filed a lawsuit alleging that his former employer was involved in crypto market manipulation without enforcing basic accounting measures to protect client deposits.
Why did Celsuis crash?
After the Terra crash, the crypto market dropped below $1 trillion due to a fresh wave of panic. After the Terra crash, nearly $1 trillion disappeared from the crypto markets. In particular, Celsius acts as the bank equivalent of the crypto world. Celsius earn, borrow, buy, barter etc. is a crypto platform that offers curated services.
The platform halted all withdrawals on June 12, citing the need for “extreme market conditions”. In the hours after the announcement, the CEL fell 70% in an hour. It traded down more than 40% the next day. During these sales, which drove the platform into bankruptcy, the crypto money market was also losing blood. As you follow on Kriptokoin.com, the crypto community now says that a similar fate will befall Coinbase.
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