Quebec's Caisse Writes Off Celsius, Saying Bet Was 'Too Soon' (bloomberg.com) 63
Quebec's $303 billion pension manager has written off its stake in bankrupt cryptocurrency lender Celsius Network, with its chief executive officer conceding the fund invested "too soon" in the sector. From a report: Charles Emond, CEO of the Caisse de Depot et Placement du Quebec, spoke publicly for the first time Wednesday about the fund's decision last year to invest $150 million in Celsius. He described the crypto industry as a sector "in transition" but defended the work done by CDPQ's staff. "The due diligence was quite extensive with many experts and consultants involved. The team came in cautiously," Emond said at a news conference in Montreal. "We had a 4% equity stake. The conversations we had internally were pretty straightforward. The teams are accountable for that."
Celsius filed for Chapter 11 bankruptcy in July, saying liabilities exceeded assets by more than $1 billion after a crash in crypto prices. The company is trying to restructure and has received multiple offers of fresh cash, a lawyer for the crypto lender said Tuesday. "Due diligence is not a guarantee of success," Emond said, adding that he has "empathy" for the thousands of clients who've seen their funds frozen in the bankruptcy process. The fund said the deal with Celsius marks the ends of its foray into crypto investments.
Celsius filed for Chapter 11 bankruptcy in July, saying liabilities exceeded assets by more than $1 billion after a crash in crypto prices. The company is trying to restructure and has received multiple offers of fresh cash, a lawyer for the crypto lender said Tuesday. "Due diligence is not a guarantee of success," Emond said, adding that he has "empathy" for the thousands of clients who've seen their funds frozen in the bankruptcy process. The fund said the deal with Celsius marks the ends of its foray into crypto investments.
Fiduciary Responsibility? (Score:3, Insightful)
I'm not sure about the laws in Canada but betting on Crypto with public funds should be a crime. Oh wait, we did that with Solyndra [energy.gov] but not to the extent that Canada did with Celsius.
Re:Fiduciary Responsibility? (Score:5, Informative)
The program that handed Solyndra and other companies money was overall profitable for The People in terms of direct payback, let alone carry-on effects from technological development. One might argue that Solyndra itself was sufficiently problematic that it should not have been included, but you can't really argue with the fiscal success of the program as a whole.
Re: (Score:1)
The program that handed Solyndra and other companies money was overall profitable for The People in terms of direct payback
I don't think so. Do you have a citation for that?
The ARRA included $27B for alternative energy. Much of that was in the form of grants for R&D that had zero "direct payback." Other money went to pilot projects that were never intended to be commercially viable.
The program may have been "worth it" in terms of tech advances and infrastructure improvements, but that is not what you are claiming.
ARRA - Renewable Energy Research and Investment [wikipedia.org].
Re: Fiduciary Responsibility? (Score:2)
Re: (Score:2)
I have personally argued previously that Solyndra was somewhat obviously a dumb technology and didn't deserve funding. My only quibble is with the overall attitude of (and I'm paraphrasing) "handing money to solar panel companies is just as bad as (whatever)" (who cares) when the project had turned a profit shortly thereafter [npr.org] — and was not in fact expected to turn a profit, but rather to promote energy technology.
However, if their tech ever made sense, it only made sense until the cost of crystalline
Re: (Score:2)
Public responsibilty in Quebec more or less amounts to "don't give more than 1/3 to the mafia." Handing $130 million to cryptoscammers was probably a net public benefit.
Re: (Score:2)
Ah yes, the canard of one company which cooked its books when applying for a government loan, was found out and cut off from further government money, and held accountable for their actions. Funny how you twats never, ever bring up the fact the government agency which gives out these loans had this program started under B [politifact.com]
Re:Fiduciary Responsibility? (Score:4, Insightful)
$150M invested in crypto out of $303B in assets is 0.049%. I'm no fan of crypto and would never put my own money in it, but an investment fund has to make at least some high-risk, high-payoff investments. The important thing is to diversify since many of them won't pan out.
Re: (Score:2)
> $150M invested in crypto out of $303B in assets is 0.049%.
Kind of like how I saw it : disbelief at first, then thank god they invested such a little percentage, followed by there's bound to be at least some really misguided 'creative' advice in a big government institution.
Re: (Score:2)
They're not -really- public funds, they're pension funds(tm). So the owners of those funds are people paying into the province's pension plan. Which are basically any Quebec government employee, or anyone employed directly by a Quebec company.
That said, Quebec politicians are pretty much know nothing about anything, and keep their voters as ignorant as possible by trying to deny them any ability to learn English. The internet is the ultimate democratizer when it comes to the ability to learn a foreign langu
Finally! (Score:5, Funny)
Re: (Score:2)
We all knew they would come around to Fahrenheit sooner or later.
I was thinking the same. The whole metric thing happened too quickly and too soon. It's nonsense like that makes people look at me funny when they're sweatily telling me that it's 38 outside and I say, "I hope you have a coat."
Next Moves (Score:5, Funny)
Although most analysts expected that the pension fund would move on to options like Fahrenheit or Kelvin, the fund managers have indicated that they will actually be going all-in with a stake in the contrarian choice Rankine.
No accountability at the Pension Fund? (Score:3)
Fahrenheit 150. The temperature at which a public pension fund burns your investment. Shockingly poor judgement. Is anyone going to be held accountable for that lapse in judgement? I suspect not.
Re: (Score:2)
This is why I consider the European model better. The money the workers pay now is used to pay the pensions of the retired. The only way this model can fail is when the country fails.
And then... bluntly, I doubt that my pension is what I care about, it's probably that I'm more busy trying to survive the next couple days.
Re: (Score:3)
It also fails when retired people withdrawing funds outnumber working people paying in. Have you heard of a demographic anomaly called "the baby boomers" that are starting to retire?
Re: (Score:2)
If a lot of people pay into the system, a lot of money can be paid. If few people pay into the system, less money can be paid.
But there is no chance of no money being paid, as is the case when a pension fund goes byebye.
Re: (Score:2)
It also fails when retired people withdrawing funds outnumber working people paying in.
It mostly fails when there is a cap on contributions. Need more get more, have more give more right? Nope. Need more you're fucked, have more you can keep it. Eliminating the cap would alone be enough to keep social security more than funded for the foreseeable future.
Re: (Score:2)
Yeah, Social Security has been 20 years from going bankrupt since... well, I remember it from the 1980s.
Not too soon to pull out of Caisse. (Score:1)
"The due diligence
There was none.
was quite extensive
No it wasn't.
with many experts
No they weren't.
and consultants
No they're not.
involved. The team came in cautiously,"
And no they didn't.
Re: (Score:2)
"Due diligence is not a guarantee of success,"
If it's not done it isn't.
If your "due diligence" didn't tell you that it was a scam, then it wasn't done, by definition.
Re: (Score:2)
IANAL and a brief skim over stuff written about due diligence leads me to believe that it's a pretty fuzzy field. Its value seems to lie in establishing where fault lies. I'd love to hear from someone with actual experience in this area, but it sounds to me like the main goal is just to be able to later convince others that you reasonably couldn't have known about whatever finally brought the whole thing down, and my immediate tendency is to assume that there is no real standard but precedent. If you (as th
Re: (Score:2)
IANAL either, but in general my understanding of due diligence is that a potential investor, buyer, etc is supposed to be able to gain access to a company's information in order to evaluate them, make sure all their numbers and claims add up, make sure the business is in the state and condition they claim it is, etc. There's usually NDAs and privileged information involved as well so any prospective buyers can get a full picture. CYA and liability is definitely a big part of it - if someone is doing due dil
Re: (Score:2)
IANAL and a brief skim over stuff written about due diligence leads me to believe that it's a pretty fuzzy field.
It is fuzzy, but that's not the point.
Extraordinary claims require extraordinary evidence, and the extraordinary claims of any crypto scheme must be backed by insanely overwhelming evidence.
br/. The level of diligence that is due for crypto must be hell of a lot more than other investments. They obviously did not do the diligence that was due, therefore they didn't do it.
Re: (Score:3)
As for whether they did due diligence, I don't know. However, there is an actual definition for due diligence and yours isn't it.
Re: (Score:1)
Using the words "crypto" and "invest" in the same sentence is the scam.
Re: (Score:2)
Re: (Score:1)
Here's Satoshi's original whitepaper on bitcoin: https://www.ussc.gov/sites/def... [ussc.gov]
Can you show us where he talks about it being any kind of investment? The word doesn't even appear once.
Re: (Score:2)
Re: (Score:2)
I see where you're coming from, and while crypto itself might not technically be a scam, it enables so much scamming and bad actors that it's hard not to link the two. When it seems like even "reputable" crypto places tend to operate in shady places in shady ways with tons of hacking, theft, malfeasance, and general trouble with little to no regulation it's hard to take seriously. Because yes, there are scams in every market, but in general there's a lot of regulation and requirements around them. Outside o
Re: (Score:2)
Re: (Score:2)
The Emperor has no clothes.
It does not "oversimplify" the problem to posit that there is no possibility of invisible, materialless clothes. You muddy the waters by entertaining such possibilities.
When one side sets up a Gordian Knot of misdirection to hide the scammy essence it, we cut through the bullshit. The fact that it is a Gordian Knot is the BEST reason why people should steer clear. The fact that they don't have any clear evidenc
Re: (Score:2)
This isn't it.
You are just providing cover for them now. A useful idiot.
Re: (Score:2)
Re: (Score:2)
How sad it is that you can't see that all of crypto is a scam.
Re: (Score:2)
Re: (Score:2)
Re: (Score:2)
Re: (Score:2)
Further, on top of being wrong, you feel the need to insult others when confronted with it.
Yeah. I insult flat earthers, anti-vaxxers, QAnon idiots when I'm confronted with being wrong in their eyes.
These past Trump years have proven that we really should insult and ostracize your lot when you make stupid arguments.
Re: (Score:2)
there is an actual definition for due diligence and yours isn't it.
Extraordinary claims require extraordinary evidence, and the extraordinary claims of any crypto scheme must be backed by insanely overwhelming evidence.
The level of diligence that is due for crypto must be hell of a lot more than other investments. They obviously did not do the diligence that was due, therefore they didn't do it.
Re: (Score:2)
Perpetual motion is not a scam. There are "free energy" scams, but there are scams in pretty much any market.
I'm not some big supporter of perpetual motion, but I do call out people for BS like this because it's just dumb.
As for whether they did due physics, I don't know. However, there is an actual definition for due physics and yours isn't it.
Re: (Score:2)
How exactly do you "pull out" of a public pension fund? Participation is not voluntary.
They invested something like 0.05% of their money in crypto and it didn't pan out. Investment firms are expected to make at least some high-risk-high-return investments. The Caisse had a 35% return on investment over the past five years, with annualized returns of 6.1% for five years and 8.3% for ten years. They're doing OK.
Re: (Score:2)
It manages funds. It is itself not mandatory to be with Caisse.
Re: (Score:2)
Among other things, it manages the funds for QPP. QPP contributions are mandatory. Please explain how it is not mandatory to be with the Caisse when they manage a fund which all citizens are required by law to contribute to.
Here's 'due diligence' for all future morons: (Score:1)
Don't bet your pension on crypto, FFS!
Re: (Score:2)
Morons will be morons...
Pensions should not invest in high risk assets (Score:1)
sector "in transition" (Score:2)
In transition from an obvious scam to an absolute bankruptcy.
a shills game (Score:3)
Re: (Score:2)
I had several arguments with members on this site who believed crypto was a game changer.
Yeah, what happened to all those people?
I haven't seen a "Bitcoin will be worth $1 million by the end of the year" type of post for ages.
Re: (Score:2)
Dont get me wrong - I’m not a fan of cryptocurrency at all. But as a system, blockchain tech does have some unique aspects and could add value i
Re: (Score:3)
That's called a hash, and it's used for data integrity. Every block includes the hash of the previous block. That way any attempt to tamper with earlier blocks can be detected. But you need to know the starting block and the correct hash for the last block, or you won't be able to do the integrity check. It's not encryption.
That's called the consensus protocol. There are different ones out there and they are not dependent on t
Climate Friendly Pension? (Score:2)
To be fair, this pension had less than 0.5% invested in Coinbase. You have to expect people managing money to make some mistakes sometimes.
But what we should rag on this guy for, is divesting of fossil fuels and then investing in cryptocurrency. At least when fossil fuels are burned, it's typically for a useful purpose...
Re: (Score:1)
60 percent of "cryptocurrency" is done by burning fossil fuel
https://www.nrdc.org/stories/c... [nrdc.org]
Too soon??? (Score:2)
Re: Too soon??? (Score:1)
Re: (Score:2)
Darn..... (Score:2)
Too Soon? (Score:1)
There is only ever a "too late" and that is what this bozo did -- got into the fad too late.
How does a fund manager not understand this fundamental truth of speculative investment? How does he still have a job? Hell, how is he not in jail?