Bankruptcy proceedings at Celsius Network | The Caisse and other unsuccessful shareholders

The debacle of Celsius Network will leave only crumbs for the Caisse de depot et placement du Québec (CDPQ) and its other shareholders. The owners of the cryptobank are unsuccessful in their attempt to be better represented during the bankruptcy proceedings.

Julien Arsenault
The Press

Kicking off the process of selling the company’s assets on Monday, the New York bankruptcy court denied the shareholders’ petition. The reason ? Celsius Network is “irretrievably insolvent”.

“The plaintiffs have not demonstrated that there is a substantial likelihood of recovery,” reads the 15-page document. In principle, no shareholders’ committee should be appointed when it appears that the debtor is irretrievably insolvent. »

If the woolen stocking of Quebecers has already written off its investment of 200 million in the controversial cryptobank, its name nevertheless appeared in the request filed last month. She alleged that “everything” revolved “around the depositors” in the bankruptcy proceedings and that the shareholders were not adequately represented.

The deposits of 1.7 million savers who were frozen last June are at risk. The sale of Celsius Network’s assets could allow them to limit their losses. The turn of shareholders, like the CDPQ, would come only if there is money left over afterwards, which seems unlikely.

“The CFO of Accounts Receivable has sworn that current liabilities (of Celsius Network) are approximately $329 million higher than assets,” the ruling reads.

The CDPQ had not commented on Monday morning on the decision of the New York court.

Like other cryptobanks, Celsius Network pooled cryptocurrency deposits. It offered loans and interest, which could sometimes reach up to 17%, to depositors.

The company, whose business model has been described as something akin to a Ponzi scheme, turned to US bankruptcy law last July. It was plunged into a liquidity crisis caused by the collapse of the price of cryptocurrencies which began at the beginning of the year.