After FTX investment loss, the $190 billion Ontario pension says no to cryptocurrency

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By Degen Lipsa

The pension fund had made two investments in the now-defunct crypto exchange, once during the pinnacle of the bull run in 2021 and again in early 2022 . But the FTX fall has created a havoc.

The Onatario Teachers’ Pension Plan has decided to steer clear of cryptocurrencies.

The decision comes after the OTPP, which controls over $190 billion in assets, lost its entire $95 million investment in cryptocurrency exchange FTX after it went bankrupt in November 2022.

OTPP was one of the many investors in the now-defunct crypto exchange, having invested twice: once during the bull market in 2021 and again during the exchange’s Series C funding round in early 2022.

In an interview with the Financial Times, OTPP chief executive Jo Taylor stated that the pension fund should not rush into another cryptocurrency investment. Taylor stated that they are still processing what happened with the exchange and that they will be considerably more cautious about investing in emerging assets such as digital currencies in the future. The pension fund is in charge of providing pensions to nearly 330,000 teachers and school employees.

“We took our time and did a lot of due diligence on the business. It didn’t turn out the way we thought. We weren’t necessarily shown all the information we needed to know to make a balanced decision.”

The pension fund is now attempting to direct its investments towards more traditional areas, such as real estate, and to get exposure to the private credit sector. The investment plan provider intends to invest 10 billion Canadian dollars ($7.4 billion) in the aforementioned domains over the following three years.

Aside from OTPP, another notable pension fund, the Caisse de dépôt et placement du Québec (CDPQ), lost its entire $154.7 million investment in the problematic bitcoin lender Celsius Network.

Celsius was one of many crypto lenders that failed amid the cryptocurrency crash in the second quarter of 2022.

The abrupt collapse of FTX, the third-largest crypto exchange at the time, had a significant influence on the entire ecosystem. Investors’ and venture capitalists’ trust in the crypto ecosystem has plummeted, and crypto investment has dried up.

It also shifted the narrative of the crypto ecosystem’s mass popularity and drew regulatory scrutiny from around the world.

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