Quebec's largest pension fund invested in a bankrupt lender.
Celsius Network filed for Chapter 11 protection in July and owes users over four billion dollars.
The photo was taken by REUTERS/Dado Ruvic.
Sources with knowledge of the probes say that Canadian regulators are working with counterparts in the US to investigate the collapse of Celsius Network.
Quebec's Autorité des marchés financiers (AMF) and other provincial regulators have been looking into the matter since mid-June.
The Caisse de dépt et placement du Québec invested $150 million in New Jersey-based Celsius. Celsius filed for Chapter 11 protection in July and owes users over four billion dollars.
If there are users and clients in the province who have their money tied up in Celsius, the Quebec Regulator is likely to focus on that.
Sources say that the Ontario Securities Commission is interested in whether the collapse affected Canadians or not.
Canadian securities regulators are collaborating with the SEC on matters that cross the Canada-U.S. border.
One source says that the SEC is working with regulators in several states. It was reported in June that state securities regulators in Texas, Alabama, Kentucky, New Jersey and Washington were investigating Celsius Network. According to Joseph Rotunda, the enforcement director at the Texas State Securities Board, the investigation was a priority and he has encouraged Celsius clients in Texas and other states to come forward.
In its first five years of existence, Celsius had 1.7 million clients and presented its services as an opportunity to take advantage of the promise of cryptocurrencies. It marketed opportunities to buy, borrow, swap and earncryptocurrencies through products including instant low-cost loans accessible via a web and mobile app and high-yield investments with returns of up to 17 percent.
Things didn't seem to go as planned. In July, the Southern District of New York filed for Chapter 11 protection.
The regulatory probes may be complicated by the possible restructuring of assets.
The director of media relations at the AMF refused to comment on the Quebec regulators interest in the Celsius case.
Théberge said that they never denied or confirmed if an investigation was underway.
The chief executive of the AMF told a government committee in Quebec in May that the regulators were trying to understand the business of Celsius.
The Ontario Securities Commission has been cracking down on people who are not registered in the state. Binance was forced to sign an undertaking to cease operations by the OSC.
A spokesman for the OSC was not available to talk about Celsius.
The Caisse de dépt invested in Celsius as part of a US$400-million financing round in October of 2021.
At the time, the Caisse had a strong management team that put transparency and customer protection at the core of their operations.
At an appropriate time, officials at the Caisse will address questions and concerns raised by the investment.
Kate Monfette, a senior adviser in media relations at the Caisse, said in an email thatCelsius is currently engaged in a complex process.
We will provide further comment at the right time.
The Caisse is making every effort to preserve its rights through the court-monitored process for the benefit of clients and characterized the Celsius investment as part of a very small portion of the overall portfolio that is invested in new technologies.
The one in Celsius isn't performing as expected.
The email is bshecter@postmedia.
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