That a Canadian pension fund thought crippled crypto exchange FTX was a safe bet says a lot about how the nature of risk can change.
It’s only a few months since Sam Bankman-Fried, the Millennial founder of cryptocurrency exchange FTX, graced the cover of iconic US publication, with the heading: The Next Warren Buffett? And it’s less than two weeks since Bankman-Fried appeared on the cover ofThat now looks exceptionally unlikely, given Bankman-Fried and FTX are at the centre of what might be the biggest calamity ever to befall the crypto sector in its short but dramatic history.
But it seems likely that FTX is worthless, or very close to it – which is bad news for the list of high-profile investors in FTX, some of which helped the exchange obtain a valuation of $US32 billion as recently as January. Taylor told Reuters the investment would help OTPP learn whether the risks and rewards of the crypto market were worth it.To be clear, the size of OTPP’s investment, which was made last year at a $US25 billion valuation, is likely to be tiny in the context of its $C242.5 billion portfolio. Given OTPP must disclose all investments over $C200 million, it’s probably smaller than that.
But what the likes of OTPP didn’t appreciate – or perhaps couldn’t see, given what the market has only really confirmed about the mingling of Bankman-Fried’s interests – was that FTX looked much different from your garden variety stock exchange.Alameda, which actually founded FTX, also acted as a market maker on the exchange.
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