Celsius, partner of the CDPQ, places itself under the protection of the bankruptcy law

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Celsius, partner of the CDPQ, places itself under the protection of the bankruptcy law

The partner of the Caisse de depot et placement du Quebec (CDPQ), which acts as a bank in the crypto world, had announced that it had frozen the funds of its customers in mid-June.

At the time of announcing it was pausing client withdrawals on June 12, Celsius was managing cryptoassets worth some US$12 billion on behalf of its clients (on file).

Celsius Network has filed for bankruptcy protection in New York State Bankruptcy Court, the company announced via press release on Wednesday evening.

This will give Celsius the opportunity to stabilize its business and carry out a [deep] restructuring that will maximize value for all [its] shareholders, according to the same press release.

About its website, Celsius says it wants to emerge stronger as a company.

It was the right decision for our community and for our business, Celsius CEO Alex Mashinsky said in a statement. I am hopeful that when we look back on the history of Celsius, we will see this as a defining moment, when we acted firmly and with confidence to serve our community and to strengthen the future of our company, he added.

The press release maintains that two new directors have been appointed to the helm of the company, which has also retained three legal teams as advisers. All are experts in financial restructuring.

According to the release, Celsius holds some US$167 million in cash, which will be used to support certain operations during the restructuring process. Celsius says it asked the court to continue paying its employees.

At the time of announcing it was pausing client withdrawals on June 12, Celsius was managing cryptoassets worth some US$12 billion on behalf of its clients, according to the company's website. Since that date, they can no longer withdraw their funds. On its website, Celsius confirms that this freeze will continue throughout the financial restructuring process.

Celsius acts as a sort of bank in the crypto world. Clients can deposit cryptoassets there and earn an annual return on their deposits. They can also obtain crypto or cash loans by placing cryptoassets as collateral.

Last week, a former business partner accused Celsius of being a fraudulent Ponzi scheme (or pyramid scheme) in a lawsuit filed in New York State.

In October 2021, the CDPQ announced that it was part of a US$400 million financing round in Celsius, led by a private investment firm.

La Caisse n' did not want to say how much money it had spent on this investment, but a Radio-Canada investigation was able to determine that this amount amounted to 150 million US dollars.

We are following the file closely and reviewing the documentation presented by Celsius. We are unable to comment further at this time, CDPQ spokesperson Kate Monfette told us.

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