The Caisse de dépôt et placement du Québec (CDPQ), an institutional investor authorized to manage retirement assets in Canada’s Quebec province, which has a largely French-speaking population, wrote off nearly all of its CA$200 million ($154.7 million) investment in troubled cryptocurrency lender Celsius Network, according to local news source LaPresse on Wednesday.
The action was taken just ten months after CDPQ and growth equity firm WestCap invested $400 million in Celsius together at a $3 billion value. At the time, Celsius had over 1,000 staff, a $25 billion asset base, and had paid depositors $850 million in interest overall.
The assets of depositors are not protected in the case of losses, and the firm is not subject to any limitations on the use of leverage because it is an uncontrolled and centralized entity. The unexpected and violent collapse of Bitcoin and other digital assets at the start of this year’s crypto winter created a $2.85 billion hole in Celsius’ net assets. As a result, it stopped allowing withdrawals from over 1.7 million clients’ accounts in June.
It seems that a very little portion of the CDPQ’s portfolio was lost on Celsius. The CDPQ’s total assets under management as of June 30 were CA$391.6 billion (or roughly $303.4 billion), a decrease of 7.9% over the previous six months. Although it has not provided any information, the organization is currently assessing its legal options against Celsius. Celsius’s financial resources are expected to run out by October, according to court documents.