Ontario Teachers’ Pension Plan Writes Off Investment In FTX
- The Ontario Teachers’ Pension Plan confirmed that they made a big crypto investment in the world’s third largest crypto exchange, FTX, and now, will have to write off that investment.
- Another fund, Caisse de dépôt et placement du Québec, completely wrote off an investment of around $150 million in the now-bankrupt crypto lending platform Celsius Network.
- Binance is set to acquire FTX due to a “liquidity crunch” initiated when the former’s CEO Changpeng Zhao, warned that this firm would be selling close to $2 billion in FTX tokens (FTT).
An independent organization responsible for administering defined-benefit pensions for school teachers in the Canadian province of Ontario, the Teachers’ Pension Plan, has confirmed that they made a big crypto investment in the world’s third largest crypto exchange, FTX, whose future remains unclear following a liquidity crunch that was initiated by the large scale sale of the platform’s native token, the FTX Token (FTT).
The Ontario Teachers’ Pension Plan is the third biggest pension fund in Canada, which invested in the trading firm led by Sam-Bankman Fried, almost a year ago. The pension fund organization also confirmed a valuation of over $25 billion at the time of investing in FTX with the hope of securing a future in the crypto space and also, adopting blockchain-based assets in a never-before seen way.
According to a report, the Ontario Teachers’ Pension Plan watched as the chief executive officer of the world’s largest crypto exchange, Binance, announced the surprise acquisiton of FTX due to liquidity crunch on the platform. This move was unprecedented and the entire crypto space was worried about another Terra-like disaster. Changpeng Zhao, also called CZ, who is the co-founder and CEO of Binance, stated that the acquisition of FTX hasn’t been confirmed and added that there are still a few things pending.
Binance will carefully assess the balance sheet of FTX, which had loopholes of around $5-$6 billion and if everything checks out, the leading exchange will acquire its competitor, leaving Coinbase as the only competitor among the top 3.
Ontario Teachers’ Pension Plan’s huge investment in FTX has stumbled and reduced to ashes following the significant crash of the FTT token which has left the crypto platform with nothing. The worth of the platform and its CEO, Sam Bankman-Fried, was majorly in FTT tokens and since most of the tokens were with the firm, there was an extreme lack of liquidity for the native token of the exchange.
As a result, the lack of liquidity and the FUD of Binance selling almost $2 billion worth of FTX tokens led to a huge crash in the price of FTT token. As the price of FTT went down more than 70% in a day, the $32 billion valuation of FTX, which was constant at the time of investment from the Ontario Teachers’ Pension Plan, has been reduced by a significant margin.
Given the fluid nature of the situation we have no comment right now,” Teachers’ spokesperson Dan Madge said Tuesday
This is not the first Canadian pension fund to write off their investment in crypto industry. Another fund, Caisse de dépôt et placement du Québec, completely wrote off an investment of around $150 million in the now-bankrupt crypto lending platform Celsius Network which filed for protection in July.