Canadian watchdogs join US SEC in Celsius probe: report

Canadian regulators are investigating the circumstances leading to the collapse of digital currency lending firm Celsius Network, joining existing probes by the U.S. watchdogs.

This is according to the report of the Toronto-based paper Financial Post, one of the Canadian watchdogs with an interest in the probe is Autorité des marchés financiers (AMF), the financial regulator for Quebec.

While the AMF’s interest is partly for the residents that may have lost their funds when the lender collapsed, it’s also partly in the interest of one of Celsius’ biggest investors.

In October 2021, the largest pension manager in Quebec, the Caisse de dépôt et placement du Québec, participated in an equity funding round that raised $400 million for the lender. Of this, the pension manager contributed $150 million, making it one of the biggest investors in Celsius and pushing the lender’s valuation to $3 billion. Most notably, at $3 billion, Celsius’ valuation had shot up 25x from its 2020 valuation of $120 million.

At the time, Caisse de dépôt was full of praise for Celsius and its leadership, helmed by CEO Alex Mashinksy. The pension giant, which has over $326 billion in assets under management, described the lender as “a leading global cryptocurrency earning and borrowing platform,” while heaping praise on Celsius’ management “that puts transparency and customer protection at the core of their operations.”

The Ontario Securities Commission (OSC) is also joining the probe into Celsius, the paper reports, citing sources with knowledge on the matter. For OSC, the interest is geared fully towards finding out how many residents were caught up when the house of cards collapsed.

The OSC and the AMF joined the U.S. Securities and Exchange Commission (SEC), investigating the lender after it froze withdrawals and declared Chapter 11 bankruptcy shortly after. Several state watchdogs, including in Texas, New Jersey, Alabama, Kentucky, and more, are also investigating Celsius.

And while the two Canadian regulators investigate Celsius, the lender wasn’t registered to operate in Canada.

The two declined to comment on or even confirm the probes.

“We never deny or confirm if an investigation is underway,” said Sylvain Théberge, the director of media relations at the AMF.

“As a matter of general policy, the OSC is unable to confirm or comment on the existence, status or nature of any complaint, review or investigation,” a representative for the OSC said.

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