Canada’s Largest Pension Fund Shuns Crypto After FTX Losses

• Canada’s largest single-profession pension plan, Ontario Teachers’ Pension Plan (OTPP), has decided not to invest in cryptocurrency following its experience with the now-bankrupt FTX exchange.
• OTPP invested $95 million into FTX but that amount shrank to zero due to the dramatic crash.
• The CEO of OTPP said they are refraining from crypto investments due to losses triggered by the FTX meltdown and feedback from their members.

OTPP Refrains From Investing in Crypto

Ontario Teachers’ Pension Plan (OTPP) – Canada’s largest single-profession pension plan – decided not to rush into another cryptocurrency investment following its bad experience with FTX. The organization was among the prominent backers of the now-bankrupt exchange, investing $95 million. The dramatic crash, though, shrank that sum to virtually zero.

Implications of FTX Meltdown

Jo Taylor – Chief Executive Officer of the $190 billion pension plan – told the Financial Times that the entity will refrain from cryptocurrency investments due to the losses triggered by the FTX meltdown. He said the decision was based in part on “feedback from our 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.“

OTPP’s Initial Investment

OTPP has previously shown support toward FTX, making two separate investments in 2021 and early 2022 for a total of $95 million. Back then, the exchange was among the leaders in its field while the crypto market was in a bull run. While this fund’s investment accounted for less than 0.05% of its total assets, OTPP faced criticism (like many others) for dealing with a company whose future seemed uncertain at best.

Feedback From Members

The CEO noted that they have taken note of feedback from their members regarding their initial investment into FTX and have decided it would be unwise to jump into another such venture: “It’d be unwise for us to rush [into another crypto investment] based on what happened with FTX.“

Lessons Learned

Though it may seem like an obvious lesson, this event serves as yet another reminder that investors need to consider all information available before investing – especially when it comes to high risk investments such as cryptocurrencies or other digital assets that can easily become worthless overnight without warning or explanation if something goes wrong behind closed doors at an exchange or wallet service provider.