The Ontario Teachers’ Pension Plan has disclosed that the $95 million it invested in FTX Trading and FTX US will have a “limited impact” on the plan.
The Ontario Teachers’ Pension Plan in a recent statement said the investment represents 0.05% of its total net assets.
If a Canadian pension fund investing in a cryptocurrency firm that’s gone bankrupt strikes a chord, it is because it has occurred before. In August, CDPQ, one of Canada’s biggest pension managers, announced that its $150 million investment in bankrupt crypto lender Celsius Network had been written off.
There are some large pension funds that have indirect exposure to a bankrupt crypto firm following FTX’s recent filing for Chapter 11 bankruptcy protection. FTX’s sister entity algorithmic trading firm, Alameda Research; its American subsidiary FTX.US and approximately 130 affiliated companies will also file for bankruptcy.
According to a report from Pensions & Investments, Alaska Permanent Fund Corp., (a $70 billion pension fund for residents) and Washington State Investment Board (a $144 billion pension fund for public employees) have Sequoia Capital’s Global Growth Fund III in their portfolios.
Sequoia, which manages at least $85 billion in assets, shared a letter recently on Twitter calling its exposure to FTX “limited.” The company revealed that it invested $150 million in FTX.com and FTX US, but it was offset by around $7.5 billion in realized and unrealized gains, as such, the fund remains in good shape.
Also, the firm noted that its SCGE Fund invested $63.5 million in FTX.com and FTX US, which represents below 1% of the fund’s portfolio.
Users were struggling to get their money off the exchange but FTX’s enabled withdrawals were limited to residents of the Bahamas.
The company said: “Per our Bahamian HQ’s regulation and regulators, we have begun to facilitate withdrawals of Bahamian funds. As such, you may have seen some withdrawals processed by FTX recently as we complied with the regulators.”
FTX’s trouble started last week after leaked documents revealed that a minimum of $5 billion of Alameda Research’s $14 billion balance sheet was FTT, a token issued by FTX. Those documents confirmed long-standing suspicions that Sam Bankman-Fried’s companies were more interwoven than he let on publicly.
The revelation generated a widespread sell-off of FTT and established a liquidity crunch for FTX serious enough that it ran to a competitor and former investor, Binance, for help.
Binance disclosed it would acquire FTX in a non-binding agreement, but pulled out of the deal a day later. The CEO of FTX, Sam Bankman-Fried, apologized and promised that the team would work on finding liquidity during the week and signed the bankruptcy paperwork that day.
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