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Ontario Teachers Sunk $95M in FTX—Pension Fund Says Collapse Will Have 'Limited Impact'

12 Nov, 20223 min readRegulation
Ontario Teachers Sunk $95M in FTX—Pension Fund Says Collapse Will Have 'Limited Impact'

The Ontario Teachers' Pension Plan says the $95 million it invested in FTX Trading and FTX US will have a “limited impact” on the plan.

The investment represents 0.05% of its total net assets, the organization said yesterday in a statement.

If a Canadian pension fund investing in a crypto firm that’s gone bankrupt sounds familiar that’s because it has happened before. In August, CDPQ—one of Canada’s largest pension managers—announced that it had written off its $150 million investment in bankrupt crypto lender Celsius Network.

There are other large pension funds that have indirect exposure to a bankrupt crypto firm following FTX’s filing for Chapter 11 bankruptcy protection on Friday morning. The firm's sister entity algorithmic trading firm Alameda Research, its American subsidiary FTX.US, and roughly 130 affiliated companies will also be filing for bankruptcy.

The Alaska Permanent Fund Corp., (a $70 billion pension fund for residents) and the Washington State Investment Board (a $144 billion pension fund for public employees) both have Sequoia Capital’s Global Growth Fund III in their portfolios, according to a report from Pensions & Investments.

Sequoia, which manages $85 billion in assets, shared a letter Wednesday evening on Twitter calling its exposure to FTX “limited.” The asset manager said it invested $150 million in FTX.com and FTX US, but that it’s offset by approximately $7.5 billion in realized and unrealized gains—”so the fund remains in good shape,” it said.

The firm also noted that its SCGE Fund invested $63.5 million in FTX.com and FTX US, which represents less than 1% of the fund’s portfolio.

On Friday afternoon, users were struggling to find ways to get their money off the exchange. FTX enabled some withdrawals on Thursday afternoon, but limited them to residents of the Bahamas.

"Per our Bahamian HQ's regulation and regulators, we have begun to facilitate withdrawals of Bahamian funds," the company said. "As such, you may have seen some withdrawals processed by FTX recently as we complied with the regulators."

Trouble started for FTX last week after leaked documents revealed that at least $5 billion of Alameda Research’s $14 billion balance sheet was FTT, a token issued by FTX. Those documents confirmed long-held suspicions that Sam Bankman-Fried's companies were more intertwined than he let on publicly.

The revelation triggered a widespread sell-off of FTT and created a liquidity crunch for FTX severe enough that it asked competitor and former investor Binance for help.

Binance said it would acquire FTX in a non-binding agreement, then backed out of the deal a day later. FTX CEO Sam Bankman-Fried offered up lengthy apologies and promises that the team would spend the week trying to find liquidity, but signed the bankruptcy paperwork the same day.

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