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Canada's largest pension fund is staying away from crypto after writing down FTX investments
The Ontario Teachers’ Pension Plan (OTPP) – Canada’s largest single-occupation pension plan – decided not to rush into another cryptocurrency investment after its poor experience with FTX. The organization was one of the now bankrupt exchange's prominent supporters, investing $95 million. However, the dramatic crash caused this sum to shrink to practically zero. Change of heart after FTX implosion Jo Taylor – chief executive officer of the $190 billion pension plan – tells the Financial Times that the company will move away from cryptocurrency investments due to losses triggered by the FTX meltdown. He said the decision was based in part on “feedback from our members,” who presumably...
Canada's largest pension fund is staying away from crypto after writing down FTX investments
The Ontario Teachers’ Pension Plan (OTPP) – Canada’s largest single-occupation pension plan – decided not to rush into another cryptocurrency investment after its poor experience with FTX.
The organization was one of the now bankrupt exchange's prominent supporters, investing $95 million. However, the dramatic crash caused this sum to shrink to practically zero.
Change of heart after the FTX implosion
Jo Taylor – Chief Executive Officer of the $190 Billion Pension Plan –toldThe Financial Times said the company will refrain from investing in cryptocurrencies due to losses triggered by the FTX meltdown. He said the decision was based in part on “feedback from our members,” who were believed to have criticized the fund’s initial interaction with the collapsed platform:
"We have learned some lessons from the investment. We have received feedback from our members. We regret any loss on their behalf."
OTPP has previously shown its support for FTX, making two separate investments in 2021 and early 2022 for a total of $95 million. At the time, the exchange was one of the leaders in its field while the crypto market was in a bull run.
While the fund's investment represented less than 0.05% of its total assets, OTPP (like many others) was criticized for being involved with a company whose founder - Sam Bankman-Fried (SBF) - is accused of fraudulent activities.
Numerous agencies and failed investors took turns naming FTX's former CEO as the main culprit for the downfall, arguing that his goal was to embezzle assets from customers.
After a brief stay in a Bahamian prison late last year (shortly after the collapse), he was deported to the US. However, the local authoritiesallowedhim to live in his parents' home under a whopping $250 million bond.
A trial scheduled for early October will determine whether he was involved in the incident and rule out his possible punishment. If found guilty, the 31-year-old could spend his life behind bars.
CDPQ lost funds due to Celsius
Another Canadian pension fund giant that had a bad experience in the crypto space last year is the Caisse de dépôt et placement du Québec (CDPQ). Itlost$150 million after investing in cryptocurrency lending platform Celsius. CEO Charles Emond explained that his company did proper due diligence before jumping on the bandwagon, although it still parted with the sum:
"The due diligence was quite extensive, with many experts and consultants involved. The team came in cautiously. We had a 4% share. The conversations we had internally were pretty straightforward. The teams are responsible for that."
Celsius filed for Chapter 11 bankruptcy protection in the U.S. last summer after pausing payouts. Similar to OTPP, CDPQ promised to stay away from crypto forays after the unsuccessful investment.
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