Canada’s Largest Pension Fund to Stay Away From Crypto After Writing off FTX Investment

The largest pension fund in Canada, Ontario Teachers’ Pension Plan (OTPP), has decided to steer clear of cryptocurrency investments after writing off its investment in FTX. The decision comes as a result of concerns over the volatile nature of the digital asset market. OTPP initially invested in cryptocurrency through FTX in early 2021, but recently wrote off the investment as part of its annual report. Despite this setback, OTPP remains committed to exploring innovative investment opportunities in other sectors. The move could further dampen institutional interest in the crypto market, as concerns over regulation and security continue to linger.

Ontario Teachers’ Pension Plan Avoids Cryptocurrency Investments After FTX Collapse
Ontario Teachers’ Pension Plan (OTPP) – Canada’s largest single-profession pension plan – has decided to avoid any further cryptocurrency investments, following its unsuccessful investment in FTX. The pension plan invested $95 million in the now-bankrupt exchange, resulting in losses that shrank that amount to almost zero. OTPP had previously shown support for FTX by making two separate investments in 2021 and early 2022, when the exchange was among the leaders in its field. However, the collapse of the platform led to OTPP facing criticism, like many others, for dealing with a company whose founder – Sam Bankman-Fried (SBF) – is accused of fraudulent activities.

Change of Heart After the FTX Implosion
Chief Executive Officer of the $190 billion pension plan, Jo Taylor, told the Financial Times that the pension entity will not invest in cryptocurrencies. He stated that the decision was made partially due to the feedback they received from their members, who presumably criticized the fund’s initial interaction with the collapsed platform. “We’ve had some learnings from the investment. We’ve had feedback from our members. We regret any loss on their behalf,” Taylor stated.

CDPQ Lost Funds Due to Celsius
Another Canadian pension fund giant that had a bad experience in the crypto field last year is Caisse de dépôt et placement du Québec (CDPQ). The pension fund lost $150 million after investing in the cryptocurrency lending platform, Celsius. Despite conducting extensive due diligence before investing, the pension entity still lost the amount. Celsius filed for Chapter 11 bankruptcy protection in the US last summer after pausing withdrawals. Like OTPP, CDPQ has vowed to stay away from any crypto investments following the unsuccessful investment.

It is now clear that pension funds are being cautious about investments in the cryptocurrency industry, especially after the collapse of FTX and the loss of funds for OTPP and CDPQ. It is essential to conduct proper research and consult widely before venturing into any investment. Cryptocurrency investments can be risky, and it is crucial to keep in mind that whatever goes up could come down just as quickly.

Leave a Comment

Google News