Ontario pulls out of cryptocurrency investment after losing $190 billion investment – CrypLogger.com
Ontario pulls out of cryptocurrency investment after losing $190 billion investment – CrypLogger.com
Author Anna Kuznetsova Reading 2 minutes Views 4 Published 04/21/2023 Updated 04/21/2023
The Ontario Teachers Pension Plan (OTPP) has decided to steer its investment away from cryptocurrencies.
The decision comes after OTPP, which manages over $190 billion in assets, lost all of its $95 million investment in cryptocurrency exchange FTX after it went bankrupt in November 2022.
OTPP was one of the many backers of the now bankrupt cryptocurrency exchange and has invested twice, once during the 2021 bull market and again during the exchange’s Series C funding round in early 2022.
OTPP chief executive Joe Taylor said in an interview with the Financial Times that it would be unwise for a pension fund to rush into yet another cryptocurrency investment. Taylor said they are still processing what happened with the exchange and they will be much more careful before investing in new assets like digital currencies. The Pension Fund is responsible for the payment of pensions to more than 330,000 teachers and school workers.
“We took our time and did a thorough due diligence on the business. It didn’t work out the way we thought. We weren’t necessarily shown all the information we needed to know in order to make an informed decision.”
The pension fund is now looking to channel its investments into more traditional markets such as real estate and seeks access to the private lending sector. The investment plan provider intends to invest C$10 billion ($7.4 billion) over the next three years to build its portfolio in the areas mentioned.
Related: Virginia County wants to funnel pension funds into growing DeFi crops
In addition to OTPP, Caisse de dépôt et Placement du Québec (CDPQ), another prominent pension fund, lost its entire $154.7 million investment in troubled crypto lender Celsius Network. Celsius was one of the many cryptocurrency lenders that went bust during the cryptocurrency mainstream in the second quarter of 2022.
The dramatic collapse of the then third largest cryptocurrency exchange, FTX, had a profound effect on the entire ecosystem. Investor and venture capitalist confidence in the crypto ecosystem has hit a low point while crypto funding has dried up. It also upended the cryptocurrency ecosystem’s idea of mass adoption and attracted the attention of regulators from around the world.
