The Ontario Teachers' Pension Plan (OTPP) has announced its decision to distance itself from the cryptocurrency industry after incurring a $95 million loss due to the downfall of a major digital asset exchange.

The collapse occurred when the exchange's CEO misused customer funds. The OTPP, which experienced significant financial consequences, has adopted a position to avoid similar risks in the future by steering clear of involvement with the cryptocurrency sector.

The now-insolvent digital asset platform, formerly the third-largest in the world, had numerous investors and supporters, including the OTPP. Managing assets exceeding $190 billion, the OTPP was among the many investors associated with the exchange.

The platform's collapse sent shockwaves through the entire cryptocurrency market. The industry faced bearish sentiment in the final months of the previous year, causing digital assets like Bitcoin to plummet to lows of around $15,000.

The repercussions of the collapse were felt across the sector, fostering a general atmosphere of uncertainty and caution among investors.

In an interview with a prominent financial publication, Jo Taylor, the Chief Executive of the OTPP association, expressed that hastily entering another crypto investment would be imprudent for the pension fund. Taylor elaborated that they are currently processing the events surrounding the exchange and would exercise significantly more caution before investing in emerging assets such as digital currencies.

It's important to note that the pension fund is entrusted with providing pensions to over 330,000 educators and school staff.

The report indicates that the OTPP's pension asset is actively exploring new investment opportunities in various sectors, including real estate, and intends to gain exposure to the private credit sector.

Over the next three years, the investment plan provider aims to allocate approximately 10 billion Canadian dollars, equivalent to $7.4 billion, to enhance and diversify its portfolio in the aforementioned sectors.

The collapse of digital asset exchanges in Canada affected not only the OTPP but also other organizations such as Caisse de dépôt et placement du Québec (CDPQ), another significant pension fund. CDPQ lost its investment of over $154.7 million to a cryptocurrency lending platform that was among many to succumb during the crypto market turmoil in the second quarter of 2022.