The collapse of FTX resulting in the loss of $95 million due to the misappropriation of customer funds by its CEO, Sam Bankman-Fried (SBF), has led to the Ontario Teachers’ Pension Plan (OTPP) deciding to steer clear of the cryptocurrency industry.
As a result of suffering significant financial repercussions, the OTPP has taken a proactive stance to avoid similar risks in the future by refraining from any involvement with the cryptocurrency industry.
The now-bankrupt cryptocurrency exchange, once the third-largest digital business globally, had several investors and backers, including the OTPP. The OTPP managed assets worth over $190 billion and was among the many investors associated with the exchange.
The collapse of FTX had a ripple effect on the entire cryptocurrency market. The market experienced a bearish sentiment in the last few months of last year, causing digital currencies like Bitcoin to plummet to a low of up to $15K.
The impact of the collapse was felt across the industry, leading to a general sense of uncertainty and caution among investors.
Jo Taylor, the Chief Executive of OTPP association, has cautioned against rushing into another crypto investment. In an interview with the Financial Times, Taylor stated that they are currently assessing what happened with the exchange and would exercise more caution before investing in emerging assets such as digital currencies. It is important to note that the pension fund is responsible for providing pensions to more than 330,000 teachers and school workers.
The OTPP’s pension asset is actively seeking new investment opportunities in various sectors, including real estate. According to the report, the investment plan provider aims to invest approximately $7.4 billion, equivalent to 10 billion Canadian dollars, over the next three years to enhance and diversify its portfolio in the mentioned sectors.
The OTPP is planning to gain exposure to the private credit sector, as per the report. It is noteworthy that the pension fund is responsible for providing pensions to over 330,000 teachers and school workers. Jo Taylor, the Chief Executive of OTPP association, has cautioned against rushing into another crypto investment and stated that they are currently assessing what happened with the exchange.
The crash of Canadian crypto exchanges had a significant impact on various organizations, including OTPP and CDPQ, a prominent pension fund. During the second quarter of 2022, many crypto lenders, including Celsius Network, went bankrupt, causing CDPQ to lose its investment of over $154.7 million in the lender.