Canadian Pension Fund Writes off Nine-Figure Loss on Celsius Investment

As the fallout from the Celsius saga continues to unfold, the identities of more parties that have suffered financial losses due to the insolvent cryptocurrency lender are gradually coming to light.

While the majority of Celsius’ retail customers and creditors are currently opposing a suggested attempt to raise funds, it appears that some significant institutions have also been severely impacted by its insolvency.

Small Losses for a Pension Giant

Earlier this week, local reports confirmed that one of Canada’s largest pension funds lost nine figures after exposure to Celsius. LaPresse, a French-speaking Canadian news source, confirmed that the Caisse de dépôt et placement du Québec (CDPQ) – an institutional investor that manages retirement assets for the Quebec region of Canada – has written off almost all of its investment in Celsius.

Per the report, the CDPQ had invested CA$200 million (about $154.7 million) in the bankrupt crypto lender. The pension fund had partnered with equity investment firm WestCap Group to invest $400 million into Celsius a little over ten months ago, with Celsius hitting a $3 billion valuation.

Now that Celsius has folded up, the retirement fund appears to be looking to move on. At a Wednesday webcast, while discussing the pension fund’s mid-year results, Charles Emond, the CDPQ’s CEO, explained that they had “arrived too soon” in an industry in transition. He added that while they had conducted extensive due diligence before investing in Celsius, the lender’s outcome had been an unfortunate event. The pension fund is now seeking possible legal options as it intends to repatriate its investment.

Despite the unfortunate events, the CDPQ is still relatively healthy. According to the fund’s financial disclosures, as of June 30, it had a total worth of CA$391.6 billion (about $303.4 billion). This marked a drop of 7.9% in the past six months, with the pension fund registering net assets of about $419 billion by the end of 2021.

More Fallout from the 3AC Implosion

Celsius has been one of the many companies significantly affected by the collapse of the now-defunct cryptocurrency hedge fund Three Arrows Capital. In July, documents obtained by industry news sources revealed that the company had loaned Three Arrows $75 million; the funds were paid in two transactions.

With the loans uncollateralised and Three Arrows’ founders effectively bankrupt, Celsius was left holding the bag. A run ensued as many investors hurried to pull their funds from the platform, taking it from about $25 billion in assets at its peak to just a little over $150 million in cash on hand.

According to filings with the United States Bankruptcy Court of the Southern District of New York earlier this month, Celsius has confirmed that it expects to hit negative liquidity by October.

Celsius isn’t the only company to be hit following exposure to Three Arrows. Last month, reports confirmed that the infamous hedge fund owes investors a staggering $3.5 billion, which it has been unable to pay back. As the documents showed, Genesis Global Trading – another lender – had been the biggest creditor, lending Three Arrows $2.36 billion in an under-collateralised loan with a margin requirement of 80%.

Crypto broker Voyager Digital was the second-largest creditor to Three Arrows, lending the hedge fund about $661 million. Interestingly, Voyager has also filed for bankruptcy in New York, with the company hoping to pay back some of its customers after freezing deposits and withdrawals. However, the payback is unlikely to occur anytime soon because Voyager is currently undergoing reorganisation.

Buy Crypto at eToro from just $50 Now!