Technology

Celsius: CDPQ may take legal action after $200 million loss

Celsius Network recently filed for bankruptcy protection in the US. (Photo: Canadian Press)

Caisse de depot et Placement du Québec is analyzing legal action it could take against crypto bank Celsius Network, which has absorbed an investment of around $200 million from Quebecers’ wool stockings.

Caisse President and CEO Charles Emond did not want to go into detail about the nature of the funds he is considering, but one has already been received: the financial institution is now treating this investment as a deadweight loss. “Under the circumstances, this is an investment that I have written off,” he said at a press conference on Wednesday when he presented Caisse’s results for the first half of 2022.

In addition, the Caisse teams that carried out the analysis and due diligence required for such investments will be held accountable for their decisions, he added in response to a question in English on the same topic.

Celsius Network recently filed for US bankruptcy protection as it found a $1.9 billion shortfall on its balance sheet.

“No one in the Foundation, and I in the first place, is not satisfied with the result of this case. But this is an exception in our venture capital portfolio,” Charles Emond said, noting that the five-year return on this portfolio was 35%.

He attributed this failure to a hasty decision in the context of runaway cryptocurrencies.

“We came too early in a sector that was in transition, with a company that had to cope with extremely rapid growth, even a growth crisis, that was in development, that became financially fragile just before the crisis, all too quickly. for the new management to execute the (recovery) plan.

“We were interested in using the potential of blockchain technology, as well as helping to regulate this industry.

“Perhaps we focused more on the potential of the business than on the current state of things,” he admitted. We knew that there were problems with the organization of the business, the necessary rules, but perhaps we underestimated the time and effort required, given the very significant growth of the company.

CDPQ reported on Wednesday a loss of $33.6 billion of its investments between January 1 and June 30, 2022, while net assets fell $28.2 billion over that period, from $420 billion to $392 billion. dollars. Charles Haemon, however, was reassuring, arguing on the one hand that the pension funds are fully capitalized and, above all, that half of these losses have been erased in the last 45 days thanks to the market recovery.

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