No way to withdraw money from own account. It is this disaster scenario that customers of the Celsius Network cryptobank were entitled to on Sunday evening, in which the Caisse de depot et placement du Québec (CDPQ) invested nearly $200 million.
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“If I had been hired by the Caisse to advise them, I would never have embarked on that company. Never,” lamented Jonathan Hamel, investor and specialist in the world of cryptocurrencies.
On Monday, bitcoin was at its lowest since late 2020, with the total market spiking below the symbolic $1 trillion mark.
While the Nasdaq lost 16% in one year, Bitcoin slumped 37% to $29,894, prompting some to want to withdraw their marbles at the same time.
Surprise suspension
However, last Sunday evening, the London cryptobank Celsius Network, which offers attractive interest rates of 10%, suddenly suspended “all withdrawals, exchanges and transfers between accounts”, she indicated on Twitter .
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In the blink of an eye, its two million members with assets of over $12 billion were no longer able to withdraw their assets.
“Our operations are continuing and we will continue to share information with the community,” said Celsius, who did not respond to our interview requests on Monday.
In the United States, Texas, Alabama and New Jersey, Kentucky had already ordered Celsius to stop offering certain accounts, according to Bloomberg.
Last October, The newspaper pointed out that Celsius was under the magnifying glass of the Financial Markets Authority, which declined to comment on Monday.
Remember that last year, the Israeli police arrested the chief financial officer of Celsius, which had just obtained a $400 million investment led by the Caisse de depot and WestCap.
The arrest had nothing to do with his work at Celsius, but concerned his activities before he joined the firm, it was assured.
The Caisse defends Celsius
On Monday afternoon, the CDPQ defended its investment in Celsius.
“In an environment of general market decline [marchés boursiers et obligations – pour la première fois depuis 50 ans], investors reduce their risk in all asset classes. In this context, Celsius has been affected by very difficult market conditions in recent weeks, more particularly by the high volume of withdrawals of customer deposits”, indicated to the Log his spokeswoman Kate Monfette.
“Celsius acts proactively to fulfill its obligations to its customers [communauté Celsius] and has honored its commitments to its customers so far. Our team is following this file very closely,” she concluded.
The Office of the Superintendent of Financial Institutions (OSFI) on Monday told the Log that it “does not oversee the Celsius network”. OSFI is a federal agency.