A Canadian pension fund, the nation’s second-largest, Caisse de dépôt et placement du Québec (CDPQ), is writing off its investment in cryptocurrency lending platform, Celsius Network. The write-off will be $150 million. Explaining the disaster, the fund’s chief executive, Charles Emond, explained that “we went in too soon into a sector that was in transition.” Scott Chipolina and Josephine Cumbo report in the Financial Times:
Canada’s second largest pension fund manager has written off its $150mn investment in crypto lending platform Celsius Network and conceded it went into crypto “too soon”.
Charles Emond, chief executive of Caisse de dépôt et placement du Québec (CDPQ), said its investment in Celsius last October marked the end of its foray into the digital asset industry.
Celsius became one of the biggest names to be caught by the sharp collapse in the price of digital assets in the spring. In June it froze customer withdrawals and weeks later filed for Chapter 11 bankruptcy protection in New York, a move that revealed a $1.2bn hole in the company’s balance sheet.
CDPQ, the $304bn investment firm that manages pension plans and insurance programmes in Quebec, said on Wednesday the stake in Celsius was written off “out of prudence”.
“For us it’s clear when we look at all of this, even if the last chapter has not been written, that we went in too soon into a sector that was in transition, with a business that had to manage extremely quick growth,” Emond said.
Critical intelligence on the digital asset industry. Explore the FT’s coverage here.
The group’s comments on Wednesday mark a sharp contrast to October, when it said its Celsius investment was a sign of its “conviction” in blockchain technology.
The write-off of the group’s Celsius holdings — a small slice of its overall portfolio — came as the fund manager reported a C$28bn ($22bn) fall in assets in the six months to the end of June this year. CDPQ said its portfolio was hit by a “rare and simultaneous” fall in both equity and bond markets, which led to a 7.9 per cent hit on its portfolio.
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