CRYPTO NEWS: A PROBLEM WITH INVESTMENTS IN THE FTX LIQUIDITY CRISIS.

A PROBLEM WITH INVESTMENTS IN THE FTX LIQUIDITY CRISIS

A PROBLEM WITH INVESTMENTS IN THE FTX LIQUIDITY CRISIS AFFECTS THE CANADIAN TEACHERS’ PENSION FUND. FTX RECEIVED AN UNKNOWN SUM FROM THE PENSION FUND AS PART OF A $420 MILLION FUNDRAISING ROUND IN LAST OCTOBER.

DUE TO ITS SIZEABLE INVESTMENT IN THE CRYPTO TRADING PLATFORM FTX, WHICH IS PRESENTLY EXPERIENCING A SERIOUS LIQUIDITY SHORTAGE, CANADA’S ONTARIO TEACHERS PENSION PLAN (OTPP) IS IN DANGER.

A PROBLEM WITH INVESTMENTS IN THE FTX LIQUIDITY CRISIS:

A PROBLEM WITH INVESTMENTS IN THE FTX LIQUIDITY CRISIS
A PROBLEM WITH INVESTMENTS IN THE FTX LIQUIDITY CRISIS

ACCORDING TO A RECENT ARTICLE FROM THE GLOBE AND MAIL, OTPP INVESTED IN FTX A YEAR BEFORE WHEN THE COMPANY WAS WORTH $25 BILLION. IN OCTOBER 2022, THE PENSION FUND, TOGETHER WITH 69 OTHER INVESTORS, ACQUIRED ITS FIRST INVESTMENT IN FTX AS PART OF A $420 MILLION FUNDRAISING ROUND.

AS FTX SWAYS, TEACHERS’ PENSION PLAN FACES PROBLEMS :

FTX WAS NOT LISTED AMONG INVESTMENTS WORTH MORE THAN $200 MILLION IN THE FUND’S ANNUAL REPORT FOR 2021, ACCORDING TO SPOKESWOMAN DAN MADGE FOR OTPP, WHICH DECLINED TO SAY HOW MUCH THEY INVESTED IN THE FAILING COMPANY.

WE DON’T HAVE ANY COMMENTS AT THIS TIME DUE TO THE CHANGING NATURE OF THE ISSUE, MADGE SAID.

ITS TEACHERS’ INNOVATION PLATFORM, A SECTION OF ITS PORTFOLIO DEVOTED TO HIGH-RISK, HIGH-GROWTH INITIATIVES, WAS WHERE THE FUNDING CAME FROM. 333,000 ACTIVE AND RETIRED ONTARIO TEACHERS’ PENSIONS ARE MANAGED BY THE OTPP, WHICH NOW HAS $242 BILLION IN ASSETS UNDER MANAGEMENT.

ACCORDING TO JO TAYLOR, CEO OF OTPP, WHO SPOKE TO REUTERS IN SEPTEMBER, FTX CARRIES THE LOWEST RISK OF ANY CRYPTOCURRENCY EXCHANGE, AND THE FUND’S INVESTMENT HAS DONE WELL DESPITE MARKET VOLATILITY.

THE FACT THAT EVERYONE ELSE IS TRADING ON YOUR PLATFORM MAKES IT PERHAPS THE MINIMUM RISK PROFILE YOU CAN HAVE, HE SAID.

THE SITUATION IS NOW REVERSED, AS FTX IS CLOSE TO BEING TOTALLY ACQUIRED BY COMPETITOR PLATFORM BINANCE AS A RESULT OF LIQUIDITY PROBLEMS. 

THE INVESTMENT PROBLEM FACING OTPP IS THE SECOND OF ITS SORT; IN AUGUST, A SIGNIFICANT CANADIAN PENSION PLAN ENCOUNTERED A COMPARABLE PREDICAMENT.

WHEN CRYPTOCURRENCY LENDER CELSIUS NETWORK SOUGHT BANKRUPTCY PROTECTION IN JULY OF THIS YEAR, CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC (CDPQ) WAS COMPELLED TO WRITE OFF ITS $150 MILLION STAKE IN THE COMPANY.

IN LATE 2021, DURING A $400 MILLION FINANCING ROUND THAT GAVE CELSIUS A $3 BILLION VALUATION, CDPQ MADE AN INVESTMENT IN THE COMPANY. CHARLES EMOND, THE CEO OF CDPQ, ANNOUNCED THE WRITE-OFF WHILE POINTING OUT THAT THE FUND HAD JOINED THE CRYPTOCURRENCY MARKET TOO SOON AND THAT THEY HAD CONCENTRATED MORE ON CELSIUS’ POTENTIAL THAN THE ACTUAL SITUATION.

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CRYPTO NEWS: A PROBLEM WITH INVESTMENTS IN THE FTX LIQUIDITY CRISIS.

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