MONTREAL – The Caisse de dépôt et placement du Québec (CDPQ) has just participated in a US $ 400 million investment in Celsius Network, a cryptocurrency interest and lending platform in the sights of US market authorities .
The investment led by WestCap, the development capital firm of former Airbnb CFO Laurence Tosi, in partnership with the Caisse, establishes a total value of US $ 3 billion for the company founded in 2017.
“Blockchain technology has disruptive potential for many sectors of the traditional economy,” Caisse chief technology officer Alexandre Synnett said in a statement. “As the adoption rate of digital assets increases, we intend to seize the right investment opportunities, while working with our partners to regulate the industry. “
The deal comes a month after Celsius found itself in the crosshairs of market regulators in Texas and New Jersey. They allege that the payment of interest in the form of the cryptocurrency issued by Celsius – CEL – constitutes an unregistered security offer.
The company disputes this interpretation.
Celsius Network specializes in deposits and loans of cryptocurrencies, such as Bitcoin or Ethereum. More than a million customers are registered on its platform, according to the company, which claims to have total assets of $ 25 billion.
Part of its business model relies on its cryptocurrency account offered to individuals, but it also offers to borrow using cryptocurrencies as collateral assets.
The company lends deposited cryptocurrencies to institutional investors. He claims that 80 percent of the proceeds from these exchanges are returned to depositors in the form of interest.
The remaining 20% is used to finance its development. For the past three years, he claims that the value of interest paid is equivalent to US $ 850 million.
Accounts paying interest on cryptocurrency deposits have gained popularity among crypto enthusiasts amid historically low interest rates on bonds and traditional banking products. Interest rates on some Celsius Network products can reach 17%.
The investment of US $ 400 million by the Caisse and its partner will enable Celsius to hire new employees and develop new products.
CEO Alex Mashinsky believes that this investment will above all reassure regulators and strengthen the credibility of his service.
“It’s not the US $ 400 million,” he told a Financial Times reporter. “It’s the credibility that comes with the people signing the check.”
La Caisse and WestCap expressed confidence in the company and assured that the crypto lender is working with regulators.
“Celsius is the world’s leading cryptocurrency lender and has a strong management team that places transparency and client protection at the heart of its business,” said Synnett.
– This report by La Presse Canadienne was first published in French on October 12, 2021.