OTPP has written off its $95 million investment in FTX, a crypto exchange that went bankrupt amid fraud allegations and a liquidity crisis.
The fund said it invested $95 million in FTX through its Teachers’ Venture Growth platform, representing less than 0.05% of its net assets.
The Ontario Teachers Pension Plan (OTPP) was among the prominent investors that backed FTX, which was founded by Sam Bankman-Fried, a 30-year-old billionaire who was dubbed the ‘King of Crypto.’
After CoinDesk discovered that Alameda Research, a trading firm controlled by Bankman-Fried, had a lot of FTT, FTX’s fortunes turned sour.
The report triggered a sell-off of FTT by Binance, another crypto exchange and a former investor in FTX, causing the token’s price to plummet and sparking a wave of withdrawals from FTX.
The exchange filed for US Chapter 11 bankruptcy on November 11, 2022, unable to satisfy its obligations.Bankman-Fried resigned as FTX CEO and is facing fraud charges.
OTPP wrote off its entire stake in FTX following the exchange’s collapse.
Jo Taylor, CEO of OTPP, told the Financial Times:
“We’re still working through what happened there, and you’re going to be careful. It’d be unwise for us to rush.”
This is not the first time a major Canadian pension fund has been caught up in a crypto-related debacle.
Caisse de Depot et Placement du Québec, which has over $300 billion in AUM, wrote off its entire $150 million stake in failing cryptocurrency lender Celsius Network in August 2022.
“We took our time and did a lot of due diligence on the business.” It didn’t turn out the way we thought,” said Taylor.
As central banks struggle to regulate inflation and interest rates, the fund is now cautiously exploring for real estate opportunities.
