Key Takeaways
- The OTPP is estimated to have over $255 billion in net assets as of 2025.
- The fund wrote off its $95 million investment into FTX as a tax loss following the exchange’s bankruptcy in November 2022.
- Plaintiffs argue that the OTPP should have been on “high alert” in 2021 following the $190 million collapse of the Canadian exchange QuadrigaCX.
The Ontario Teachers’ Pension Plan (OTPP) is facing a class-action lawsuit from fund members following its investment misstep into the now-defunct cryptocurrency exchange, FTX.
Plaintiffs allege the board failed to meet its fiduciary duties and wishes to see the multi-million loss restored to the fund, but the pension’s board argues it performed its due diligence and that the $95 million loss represents less than 0.05% of the fund’s net assets.
Pension Fund Lawsuit
As per BNN Bloomberg, documents show that the OTPP board is facing a sizeable lawsuit from a plaintiff who is proposing to act on behalf of the fund’s 340,000 active and retired teachers.
According to a statement of claim filed with the Ontario Superior Court of Justice, the suit requests that the board reimburse the $95 million it lost back to the fund and alleges that the board breached its fiduciary duties by failing to meet obligations under Ontario’s Pension Benefits Act when making the FTX investment.
“During its due diligence and investment approval process, the board failed to obtain adequate and reliable information about the FTX entities’ internal controls in the critical areas of management and governance, finance and accounting, as well as digital asset management, information security and cybersecurity,” the statement wrote.
Naturally, the OTPP contends this and said that the claim “is without merit” and will defend their decision in court.
“We take our responsibility for the investment of plan assets seriously and have strong investment risk management processes, including robust due diligence on all private investments,” the OTPP asserted.
Regardless, the complaint argues that the OTPP didn’t comply with its own Statement of Investment Policies and Procedures (SIPP), which mandates the fund to “weigh relevant risks” based on environmental, social, and governance factors. “over both short and long-term horizons.”
FTX Oversight
In October 2021, the OTPP allocated a $75 million investment into FTX International and FTX.US.
In January 2022, the fund purchased an additional $20 million stake in the blossoming exchange.
In November 2022, FTX filed for bankruptcy following revelations that it had misappropriated billions in user funds, among other violations of the law.
The OTPP was forced to draw down its FTX stake to $0, writing it off as a $95 million loss.
A November 2022 statement Growth (TVG) platform was established to gain “small-scale exposure” to emerging tech firms and offer early/late-stage capital to said firms.
Despite this, the OTPP statement noted that the $95 million loss will bear a “limited impact” and represents less than 0.05% of its asset portfolio.
The plaintiff’s lawsuit claim also alleges that the OTPP failed to observe the significant risks following the regulatory fallout from the 2021 $190 million collapse of the Canadian exchange, QuadrigaCX.
Eddie is a gaming and crypto writer at CCN. Covering the often weird and wonderful world of Web3 with an adoring, but skeptical eye.
Prior to CCN, Eddie has spent the past seven years working his way through the crypto, finance, and technology industry. He began with PR and journalism with Bitcoin PR Buzz and BitcoinNews.com, eventually working his way to become a copywriter with a dozen firms, including the likes of Polkadot before returning to journalism in 2023.
Having studied Radio production and journalism at University in the UK, Eddie spent a few years making podcasts and presenting on a local London radio station as he built up his writing chops.
A lifelong skateboarder, Eddie can often be found at the skatepark or touring the streets looking for something new to try. That, or kicking back playing JRPGs on his original PSP.
