- FTX, the crypto exchange in crisis, found backers in BlackRock, VanEck, and Ontario Teachers.
- The solvency crisis facing the exchange and its famous CEO raises questions of a ripple effect.
- Institutional asset managers are more entangled with the crypto ecosystem than ever.
Last year, some of the biggest names in institutional investing placed their trust in giant cryptocurrency exchange FTX and Sam Bankman-Fried, its widely followed founder and CEO, during a boom in the crypto market.
BlackRock was among the asset management firms that made a small investment in FTX through its funds. Ontario Teachers, among the world’s largest pension plans, also invested. So did the fund manager VanEck, which offers an exchange-traded note that invests in FTT, the FTX token that has lost much of its value this week.
Now, in the middle of crypto winter, FTX is in the middle of a solvency crisis. Binance, a rival crypto exchange that was initially going to buy FTX, backed out. Investors, consultants, and analysts are raising concerns this week that the turmoil could spill over across the crypto ecosystem that has never been closer to traditional financial firms.
