BlockFi , a cryptocurrency bank, filed for bankruptcy Monday. This announcement came less than three weeks after the financial collapse at FTX, one the largest cryptocurrency exchanges in the world.
Investors who were on the bleeding edge of finance are feeling the effects of the collapse of unregulated and free-wheeling cryptocurrencies. However, the $76.7 million Alaska Permanent Fund’s impact has been minimal, according to statements and public records of the corporation that manages the fund.
Marcus Frampton, chief investor officer at the Alaska Permanent Fund Corp. said that for a time, he was receiving a lot letters stating that it was absurd that they didn’t have any cryptocurrency.
He said that “Those letters had slowed down somewhat” at the time.
Although cryptocurrency is not part of the corporation’s publicly traded assets, the fund invested in companies that allow for the trading of cryptocurrencies.
The majority of these investments are made in the $15.3 billion private capital and special opportunities portfolio.
Private equity is money that the corporation uses to invest Permanent Fund money in companies that aren’t yet selling stock on the open market. The intention is to purchase a portion of a company that will grow rapidly and become more valuable when the corporation “goes public”.
The fund invests in third party firms that choose companies to invest in. Paulyn Swanson (APFC’s communications director) said that FTX was one such firm.
She stated in an email that the Alaska Permanent Fund has an indirect exposure to FTX of approximately $4,000,000 through our private equity programme.
The fund’s crypto investments are only a small fraction of its private equity portfolio.
Swanson stated that APFC’s Private Equity Program, which includes Venture Capital, had invested around $20 million in crypto-related investments. It has investments with a value of $70million and has received distributions of $70million. Although the current valuations of these investments could be under pressure in the future this sector has proven to be a profitable area for APFC’s investment.
Swanson, when asked for details on the successful investment of the fund, stated that the corporation was an early investor at Coinbase a cryptocurrency exchange.
Swanson stated that two venture capital investments were made for APFC and resulted in substantial gains when Coinbase started selling stock publicly.
These investments have returned $67.6 millions in gains. She said that Coinbase’s win in venture capital was the vast majority of the $70 millions we have received back in distributions.
Public records indicate that Coinbase still has some stock. However, the stock’s value was only $250,000 at Sept. 30, according to public records.
The Alaska Beacon originally published this story. It is republished with permission.
