Ontario Teachers Bet $95 Million USD on Now-Bankrupt Crypto Exchange FTX
The Ontario Teachers’ Pension Plan had a whopping $95 million USD invested in the now-bankrupt cryptocurrency exchange FTX — reports the Financial Post.
However, the company’s board says its potential exposure to the downfall of FTX is less than 0.05% of the plan’s total net assets. As of June 30, the Ontario Teachers’ plan had $242.5 billion in net assets.
“While there is uncertainty about the future of FTX, any financial loss on this investment will have limited impact on the Plan,” the Ontario Teachers’ Pension Plan Board said in a statement.
Since the organization’s statement, though, FTX has filed for Chapter 11 bankruptcy in the U.S. (via CNBC). FTX’s founder and chief executive officer Sam Bankman-Fried has also stepped down, handing the reins over to John J. Ray III.
“The FTX Group has valuable assets that can only be effectively administered in an organized, joint process,” said FTX’s new CEO.
“I want to ensure every employee, customer, creditor, contract party, stockholder, investor, governmental authority and other stakeholder that we are going to conduct this effort with diligence, thoroughness and transparency.”
That said, bankruptcy proceedings will likely take a while. It might be quite some time before the Ontario Teachers’ Pension Plan gets any of its investment back, if at all.
On Thursday, the Teachers’ Pension Plan disclosed that its venture investment arm, Teachers’ Venture Growth (TVG), invested $75 million in both FTX International and its U.S. subsidiary, FTX.US., in January 2022, followed by an additional investment of $20 million in FTX.US.
“Naturally, not all of the investments in this early-stage asset class perform to expectations,” the pension fund company said in its statement. “However since inception, TVG has delivered solidly on intended objectives.”
FTX’s collapse began when it hit a liquidity wall earlier this week. The exchange started denying withdrawals to its users and desperately needed a bailout.
Fellow cryptocurrency exchange Binance offered to acquire FTX, but pulled the deal on Wednesday following “corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations.”
As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of https://t.co/FQ3MIG381f.
— Binance (@binance) November 9, 2022
FTX was one of the biggest names in the crypto space before its fall from grace. That said, the cryptocurrency market as a whole has had a pretty turbulent 2022. Back in July, Toronto-based crypto lender Voyager Digital also filed for bankruptcy.