Ontario Teachers’ Pension Plan (OTPP) has decided to steer clear of the cryptocurrency industry after losing $95 million from their investment in FTX, a now-defunct digital currency exchange. The news was reported by Financial Times.
OTPP, which has a total value of $190 billion, joined other prominent money managers in investing in FTX in 2021 and early 2022. However, the exchange suffered a significant downfall in November 2022, leading OTPP to entirely write off its investment. FTX’s founder, Sam Bankman-Fried, is currently facing accusations of fraud.
OTPP’s CEO, Jo Taylor, stated that the fund conducted extensive due diligence on FTX before investing and is now avoiding the cryptocurrency industry after the investment failed. Taylor also acknowledged that OTPP did not receive all the necessary information to make an informed decision.
Despite being a relatively small investment, OTPP, along with other FTX backers, has been scrutinized for investing in a company whose founder is accused of fraud and embezzlement. Taylor emphasized the importance of caution and feedback from members in considering future crypto investments.
Other Canadian pension funds, such as Caisse de dépôt et placement du Québec, also suffered losses in the crypto sector. The latter wrote off a $150 million investment in Celsius. Taylor acknowledged that OTPP has learned from the experience and regrets any losses experienced by members.
The move by OTPP to avoid the cryptocurrency industry is a blow to the sector, as reputable and top-tier investors were seen as endorsing the rapidly expanding but loosely regulated industry. However, it also highlights the need for caution and thorough due diligence when investing in the cryptocurrency space.
The cryptocurrency industry has been under scrutiny in recent years due to its volatile nature and lack of regulation. While some investors have profited handsomely from their investments, others have suffered significant losses. The decision by OTPP to steer clear of the industry may prompt other investors to exercise caution when considering cryptocurrency investments.
In conclusion, the decision by OTPP to avoid the cryptocurrency industry following their loss from investing in FTX highlights the need for caution and thorough due diligence when investing in the cryptocurrency space. While some investors have profited from their investments, others have suffered significant losses. The move by OTPP may prompt other investors to exercise caution when considering cryptocurrency investments.