The Ontario Teachers’ Pension Plan (OTTP), one of Canada’s largest pension funds, announced on Thursday plans to write off its entire $95 million investment in the bankrupt FTX cryptocurrency exchange.
Ontario Teachers said it invested the capital across two funding rounds. In October 2021, the pension fund invested $75 million in FTX International via a series B funding round. In January this year, it invested another $20 million in FTX.US via a Series C.
Ontario Teachers said it made the investments through Teachers’ Venture Growth (TVG) platform and the investment represented less than 0.05% of the fund’s total net assets.
The teacher’s pension fund said: “The financial loss from this investment will have limited impact on the Plan, given its size relative to our total net assets and our strong financial position.”
However, it said it is disappointed with the outcome of such investment, as it takes “all losses seriously and will use this experience to further strengthen our approach.” OTTP, therefore, said it will write down its investment to zero at the end of the year.
As of June this year, Ontario Teachers had $242.5 billion in assets under management, as per a recent investor presentation.
In August, another large Canadian pension fund, Caisse de Depot et Placement du Quebec with over $300 billion in AUM, wrote down its entire $150 million investment in failed crypto lending firm Celsius Network.
Contagion Effects in the Aftermath of FTX’s Collapse
The Ontario Teachers becomes the latest to launch plans to mark down to zero its investment in crypto exchange FTX.
On Thursday November 10, Venture capital firm Sequoia Capital announced plans to write down its over $210 million investment to zero in FTX after the venture firm detected possibilities of bankruptcy loom facing FTX.
A day later, Coinbase announced intentions to write off its $15 million investment its ventures arm made in FTX in 2021. Coinbase said while its investment’s total exposure is minimal, the funds invested in FTX were used to facilitate its business operations and client trades.
On Tuesday November 15, Japanese investment firm SoftBank also wrote off about $100 million it invested in the now bankrupt FTX exchange. SoftBank said it backed FTX after the crypto exchange raised $400 million in January, giving it a valuation of $32 billion.
On Thursday November 17, Singapore state investment fund, Temasek, also marked down its entire $275 million investment in FTX, making it the firm that probably lost the most.
Last week on November 11, FTX filed for bankruptcy protection in the U.S., after facing a “severe liquidity crisis.” The collapse of the giant crypto exchange marked a stunning downfall for one of the largest and most powerful players in the digital asset industry. Coinstelegram.com reported the matter.
Author Nicholas Otieno