Ontario Teachers Pension Plan (OTPP), Canada’s third-largest pension fund, placed a massive bet on the crypto exchange FTX in October 2021 with two different investments, according to reports.
OTTP participated in a $420 million funding round conducted by FTX last year, placing the exchange’s total valuation at $25 billion. Later this year, the pension investment fund, alongside other institutional investors, took part in a series C funding round and contributed approximately $400 million.
FTX Trading Carries Lowest Investment Risks
At the time of the investments, the fund disclosed that FTX has the lowest risk in investments in the entire crypto space, Reuters reported.
However, the investment has taken a new swing as the exchange faces an impending loom due to a liquidity crisis.
The woes, described as a liquidity crunch by Binance CEO Changpeng Zhao (CZ), started last week after Binance disclosed its plans to liquidate all its FTT positions. The decision stemmed from rumors that Alameda Research could likely face bankruptcy due to massive paper exposure to some altcoins.
Just yesterday, FTX signed a deal with the rival company Binance for possible acquisition to bail out the firm from its current situation for the sake of investors.
The acquisition news resulted in a bloodbath as investors rushed to withdraw their assets from the exchange.
Despite the revelation, OTTP still maintained its earlier stance on FTX. The company’s spokesperson Dan Madge said yesterday that the investment fund had no comment on the matter yet.
“Given the fluid nature of the situation, we have no comment right now,” said Madge.
Although the company never disclosed the actual amount it invested in FTX, OTTP listed the investments on its Teachers’ Innovation Platform, a part of its portfolio dedicated to high-risk to high-growth, yet high-risk, investments.
Earlier in June, the total assets in the Teacher’s Innovation Platform reached a total of $8.2 billion which represented only 3% of Teachers’ $242.5-billion in assets.
Not the First
Meanwhile, OTTP is one of two Canadian pension investment groups to get burned into crypto investments. In 2021, the Caisse de dépôt et placement du Québec invested in the now troubled crypto lender Celsius Network.
The popular lender went into bankruptcy earlier this year after suffering from a significant liquidity crisis, just like FTX.
The firm led a $400 million investment round with $150 million, which earned it a 4% equity stake in Celsius.
The deal with Celsius Network marked Caisse’s entrance into the industry. The company’s chief, Charles Emond, wrote off the investment after the incident, noting that the investment was too soon, Bloomberg reported.
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